Standard Chartered’s “strategic transformation” may not be as radical as HSBC’s “strategic review” – HSBC is cutting 35,000 people, while SCB is trimming a few hundred – but the banks are both putting Asian wealth management centre stage as they overhaul their operations. They will be hiring relationship managers this year in the offshore hubs of Singapore and Hong Kong.
On Tuesday, HSBC announced that it is prioritising Asian wealth management and private banking and investing $3.5bn into this business. HSBC wants to become “the number one wealth manager in Asia in the medium to long term”. Stan Chart today revealed the next stage of its transformation. It is also doubling down on its wealth and private banking franchises alongside three other strategic priorities: mass retail, sustainability, and “network” (relationships with core wholesale clients).
Standard Chartered uses the catch-all term “affluent” client banking when referring to both its lower-end wealth brands (“priority” and “premium” banking) and its private banking offering. “We will reinforce our strong credentials in the affluent segment by building loyalty and trust through offering our clients personalised wealth advice based on superior insight,” CEO Bill Winters said today. Stan Chart wants to “be among the top three affluent brands” in its main markets, according to its 2020 annual report.
Unlike HSBC, which is hiring 5,000 staff in Asian wealth over the next five years, Standard Chartered has not announced headcount numbers to support its expansion in Asian wealth. But recruitment on a large scale is inevitable, says a Singapore headhunter. Although Stan Chart is investing in its digital wealth platforms, relationship managers still play a vital role in driving up assets under management, he adds. CEO Winters said Stan Chart would be “bringing in expertise in critical areas”, which presumably includes wealth given that it has been singled out as a priority for 2021.
In private banking, HSBC has an edge over Stan Chart when recruiting, says the headhunter. “HSBC has the stronger brand,” he adds. HSBC is the third largest private bank in Asia by assets, while Stan Chart ranks 12th, according to latest available (end-2019) figures from Asian Private Banker. Both will find it far from straightforward to take on new bankers this year because several other firms – notably Nomura and Deutsche Bank – are expanding in the sector, which is dominated by Swiss giants UBS and Credit Suisse.
It should be a more even competition between HSBC and SCB for relationship managers in mass-affluent wealth, although other banks are also hiring in this segment. Citi announced in December that it’s taking on more than 330 relationship managers for its wealth team in Singapore by 2025 as it aims to double AUM growth and triple the number of wealth clients in the Republic. Asia Pacific wealth management assets are forecast to nearly double to $30 trillion by 2025, according to PwC.
Stan Chart’s investments into its affluent business in 2020 increased its number of premium, priority and private clients by 7% year-on-year, although income decreased 1% to $3.5bn. The bank’s annual profit before tax fell 57% year-on-year to $1.6bn and fell short of analysts’ estimates. Credit impairment charges more than doubled. “Our profit reduced despite lower costs due to a combination of lower interest rates that affected income and higher impairments driven in part by the reserves that we built to absorb possible future credit losses as the pandemic unfolds. But we remained highly liquid and our capital position actually strengthened further,” group chairman José Viñals said in a statement.
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