HONG KONG -- HSBC Holdings, which plans to cut about 35,000 jobs globally by 2022, is sticking with its plan to hire 500 additional wealth managers and retail bankers in Asia to tap into the fastest-growing wealth-management market in the world, despite the uncertainty from the coronavirus epidemic afflicting the region.
The new hires will be in Hong Kong, Singapore and mainland China, and add to the 800 others -- including private-bank relationship managers, investment counselors and product specialists -- who have already joined the London-headquartered bank in Asia since 2017, HSBC said on Monday.
The expansion plan is a bid by HSBC to catch up with rivals and could face challenges as the Asian talent pool is limited, according to a wealth-management industry recruiter.
The bank unveiled a business unit that combines retail banking and wealth management, and boasts $1.4 trillion in assets, with nearly half of that in Asia.
The changes are part of HSBC's drive to reshape and simplify itself in a bid to slash $4.5 billion in costs and invest in higher growth areas, such as Asian asset and wealth management, where assets under management are estimated by PwC to double to almost $30 trillion by 2025 from $15 trillion in 2017.
The combined business "creates one of the world's largest and fastest-growing wealth franchises, centered in Asia and serving clients around the world," Charlie Nunn, who joined HSBC in 2011 and took over as the head of the unit last month, said in a statement.
The unit will cover the entire spectrum of private wealth, from retail clients to ultrahigh net-worth individuals, HSBC said.
Months of anti-government protests that have roiled Hong Kong, HSBC's largest market and a key wealth hub, and the new coronavirus that has infected tens of thousands around the world and led to more than 3,000 deaths -- with the vast majority in mainland China -- has not changed HSBC's hiring target or the geographical composition of its planned staff additions, a spokeswoman said.
HSBC in late 2018 announced plans to add 1,300 retail bankers and wealth managers in Asia and since then has been adding to its ranks. The lender said its wealth revenues grew 12% in 2019 to $5.7 billion. Global private banking businesses' pretax profit climbed by 19% and attracted a record $23 billion of net new money in 2019. Two-thirds of that came from Asia, where client assets reached $151 billion.
HSBC, the largest foreign lender in Asia, lags in private-banking assets under management, according to data compiled by Asian Private Banker. At the end of 2018, HSBC ranked behind UBS and Credit Suisse, the data showed. The data excluded Citigroup and DBS, both of which had more assets, as the two banks intermingled private banking and non-private banking assets.
HSBC is "playing catch-up" rather than leading the way in Asia, where competitors have been expanding for years, said London-based Rahul Sen, a specialist in private-wealth management at search firm Boyden.
Competition is also strong in the market with banks such as Nomura Holdings bolstering its ranks to service the growing numbers of affluent and ultrawealthy clients. The Asia-Pacific region had one in four of the world's millionaires or about 13 million in 2019, with the number projected to grow to about one in three, or almost 20 million out of 62 million globally, by 2024, according to a report by Credit Suisse.
The medium- to long-term allure of the market remains intact despite the impact of the coronavirus epidemic that has scuttled large swathes of China's economy and the protests in Hong Kong. However, it will be an uphill task for HSBC to select the right people, Sen said.
"There is not enough talent in Hong Kong and Singapore, as there is no hinterland where they can hire from," Sen, a former private banker at HSBC, said. "The talent pool is very tight. HSBC is a big bank, and relationship managers on the private-wealth side" will be picky.
For instance, the requirement for a client with $50,000 in surplus assets is different from, say, one with $5 million or $20 million, he said.
HSBC said in its statement that while its private banking arm will move under the umbrella of wealth and personal banking, it will remain a distinct brand.