HSBC Singapore sets ambitious plan to capture Asian wealth
HSBC Singapore’s Retail Banking and Wealth Management (RBWM) business will target individuals with USD1-5 million in investible assets. While its Private Banking arm will target individuals with more than USD5 million, in particular the ultra high net worth segment with USD100 million or more in investible assets2.
Both Private Banking and RBWM will also leverage the capabilities of HSBC’s Insurance and Asset Management business to further enhance and expand its product suite targeting the HNWI segment.
The rising domestic wealth and international flows to Singapore underpins HSBC Singapore’s wealth strategy
Domestically, Singapore continues to see positive year-on-year increase of its own HNWI population (11.5%) and wealth (12.8%) in 2017, according to CapGemini.3
Moreover, Singapore is increasingly a destination for offshore wealth:
- It is now a top-three offshore wealth booking centre globally,4 managing USD1.1 trillion of personal wealth.5
- 67% of Singapore’s private wealth comes from offshore sources.6
- Singapore is the preferred location by Southeast Asian HNWIs, and top three choice for Chinese and Indian HNWIs.7
- 17% of Chinese offshore wealth is banked in Singapore.8
Private Banking to continue focusing on supporting the personal wealth needs of HSBC’s corporate banking clients
HSBC Singapore’s Private Banking plans to tap into HSBC’s corporate banking relationships across the region. To date, HSBC’s corporate customer base in ASEAN include more than 10,000 clients, of which 4,500 are subsidiaries of multinational corporations, and 20,000 small and medium-sized enterprises.
In 2017, more than half of HSBC’s Global Private Banking Net New Money was derived through collaboration with other global businesses. As a comparison, Singapore’s Private Banking has enjoyed a similar run rate in the first half of 2018.
Mr. Philip Kunz, Head of Private Banking, Southeast Asia said: “Singapore’s economic relevance and centrality to ASEAN and China means it’s becoming the epicentre for commercial activity. Family businesses are thriving within the region, their personal wealth is rising and a lot of that is shifting to Singapore.”
“Commercial Banking is the jewel in the HSBC crown, and we have one of the largest corporate client calling cards across the banking industry. We have only begun to scratch the surface of the personal wealth opportunity within our own corporate banking network.”
To support the growth ambition, Singapore’s Private Banking will double the existing headcount of its business over the next five years. Two-thirds of these roles will be client-facing relationship managers, investment counsellors and product specialists.
“We start from a strong foundation already as one of the region’s largest private banks. When it comes to attraction of talent, we’ve had no shortage of interest bringing in high calibre hires and internally recruiting. Many of the recent investment specialists coming into the team bring decades worth of institutional wealth management experience. This increases our bench strength with incredibly sophisticated advisors and demonstrates HSBC’s standing in the market.”
Retail Banking to focus on HNWI with USD1-5 million of investible wealth
HSBC Singapore’s RBWM serves the banking and wealth needs of customers across all segments, be it mass, emerging affluent and high net worth9. While it is investing into the business to achieve broad-based growth, it is particularly focused on accelerating its market share in the HNWIs space centred around its Jade proposition.
HSBC Jade is a dedicated proposition providing HNWIs with more tailored portfolio management services, and unique lifestyle experiences and offerings. Since its launch in late 2016, its customer base has grown two-fold.
Given Asia’s middle-class base and average household income are expected to more than double by 203010, HSBC sees significant potential for growth in its retail wealth business in Singapore. To effectively capture these opportunities, HSBC Singapore’s RBWM will double the headcount of its wealth sales force, specifically relationship managers and business development managers servicing HSBC Jade customers, over the next five years.
HSBC Singapore’s RBWM will further invest in a comprehensive digital-led wealth platform that allows its customers to invest and manage their wealth seamlessly.
Mr. Anurag Mathur, Head of Retail Banking and Wealth Management, HSBC Bank (Singapore) said: “Our well-established retail banking presence in this region, and around the world, places us in an enviable position. Our business in Singapore is primed to serve over one million of HSBC’s high net worth customers from around the region, as well as China and India, to grow our wealth business. We already have market-leading international banking capabilities and a highly distinctive Jade proposition for HNWIs. We are now also ramping up our wealth management sales force and our digital capabilities to better cater to the needs of our ‘global citizens’ in Singapore and around the region.”
Singapore is a large part of HSBC’s global wealth-focused growth strategy
The announcement reflects HSBC’s ambition to grow wealth revenues in Asia by at least USD1 billion by 2020. Almost half of this revenue growth (USD400 million) will come from HSBC’s retail and private banking wealth management businesses, with the HSBC Insurance and HSBC Global Asset Management businesses also being significant contributors.
To realise the growth, HSBC will expand its frontline wealth teams (retail and private banking) by adding 1,300 roles, primarily in Hong Kong, Singapore and Mainland China. It will also invest USD15-17bn by 2020 primarily in growth and technology. As one of only eight “scale”11 markets for HSBC globally, Singapore expects to receive a considerable proportion of this investment spend over the coming years.
Note to editors:
HSBC supports across the wealth spectrum in Singapore
HSBC Singapore is ideally positioned to serve the wealth needs of individuals in the region. Currently, HSBC Singapore’s retail banking and wealth management business serves the mass, emerging affluent and high net worth segments with up to USD5 million in cash and/or investments, while its private banking arm serves the wealth needs of high net worth individuals with minimum USD5 million in investible assets. This means HSBC Singapore can support the entire wealth journey of the growing middle class, where many of them will become the millionaires of tomorrow, as well as the millionaires of today.
HSBC Singapore RBWM’s customer segments are defined as followed: Mass (Personal Banking) – Min. S$2,000 in deposits or S$30,000 annual income to qualify for a card or personal loan; Emerging Affluent (Advance) – Min S$30,000 total relationship balances, S$3,500 monthly salary credit and holds a card/personal loan or Property Loan of at least S$200,000; Affluent (Premier) – Min. S$200,000 total relationship balances, S$15,000 monthly salary credit or Property Loan of at least S$800,000; High net worth (Jade) – Min. S$1.2 million and up to S$6.5 million total relationship balances
Singapore is a “scale market” for HSBC globally
As it enters a new growth phase, HSBC aims to play a critical role in supporting Singapore’s ambition to be the leading wealth and trade hub of the region. In March 2018, HSBC Singapore announced a new country strategic plan which included building its people, product and technology capacity across its wholesale and consumer banking businesses. Overlaying the Singapore plan, HSBC globally announced plans (at its investor update in June), to accelerate growth through the build-out of its wealth, insurance and asset management businesses in Asia, as well as its presence in ASEAN. Singapore was also announced as one of only eight markets amongst HSBC’s 66 countries that was classified as a ‘scale market’ into which Group investment will be channeled to support material growth. The aspiration for these “scale markets” is to be considered one of the leading domestic banks. Each of these eight markets will support HSBC’s universal banking model i.e. provide full suite of wholesale and consumer banking solutions, they must be able to achieve or currently have at least USD1billion in revenue and 3-5% market share.
About HSBC Singapore
HSBC Group’s history in Singapore dates back to 1877 when its founding member, The Hongkong and Shanghai Banking Corporation Limited, opened its first branch on the island. A qualifying full bank, HSBC in Singapore offers a comprehensive range of banking and financial services including retail banking and wealth management; commercial, investment and private banking; insurance; forfaiting and trustee services; securities and capital markets services. One of the earliest banks to establish in Singapore, HSBC today is a prominent player in Singapore's financial services sector serving the banking needs of multi-national corporations, home-grown businesses, private banking clients, institutional and retail customers. In May 2016, HSBC locally incorporated its retail banking and wealth management business in Singapore and established, HSBC Bank (Singapore) Limited. Till this day, HSBC's flagship office remains at the original Collyer Quay site where its first branch was set up. HSBC Singapore has a retail network of 11 branches (of which 9 are dedicated HSBC Premier Centre) and many locations across the island providing self-service terminals.
About HSBC Private Banking
As part of the HSBC Group, one of the world’s largest banking and financial services organisations, HSBC Private Banking seeks to be the leading international private bank for business owners and their families. It provides clients with wealth, business and family succession solutions in the largest and fastest growing markets around the world. HSBC Private Bank is the marketing name for the private banking business conducted by the principal private banking subsidiaries of the HSBC Group. For more information, visit www.privatebanking.hsbc.com
The Hongkong and Shanghai Banking Corporation Limited
The Hongkong and Shanghai Banking Corporation Limited is the founding member of the HSBC Group, which serves our customers through four global businesses: Retail Banking and Wealth Management, Commercial Banking, Global Banking and Markets, and Global Private Banking. The Group serves customers worldwide from around 3,800 offices in 66 countries and territories in Europe, Asia, North and Latin America, and the Middle East and North Africa. With assets of US$2,607bn at 30 June 2018, HSBC is one of the world’s largest banking and financial services organisations.
1 Private banking & RBWM wealth is qualified as deposits and investments
2 High net worth individuals qualified as those with USD1 million plus in investible assets. Ultra high net worth individuals qualified as those with USD100 million plus in investible assets.
3 CapGemini World Wealth Report 2018 – HNWIs are defined as those having investible assets of USD1m or more
4 BCG Seizing the Analytics Advantage: Global Wealth 2018
5 Range combining estimates by BCG, Bain and Cap Gemini
6 CapGemini 2017 wealth report
7 CapGemini 2017 wealth report
8 CapGemini Asia-Pacific Wealth Report 2017
9 Reference “Note to Editor”
10 OECD, Middle class defined as household with daily expenditures between USD10 & USD100 per person in purchasing power term
11 HSBC’s 11 June 2018 Strategy Update (Page 9 of 32). More information in “Note to Editor”