The bank, which has come under fire over its support for the legislation, on Friday announced it was starting a new service to provide customers in mainland China with digital wealth and insurance planning services. It will initially cover new customers in Guangzhou and Shanghai, according to a statement. The bank is also establishing a fintech company to support its business.
At a time of increasing political turmoil, China’s rapidly growing middle and upper class is still the grand prize for banking giants across the world, with households sitting on about 90 trillion yuan ($12.7 trillion) in investable assets. Firms from UBS Group AG (NYSE:UBS) to Nomura Holdings (NYSE:NMR) Inc. and Credit Suisse (SIX:CSGN) Group AG have identified wealth management as a prime focus for their onshore businesses amid a market opening.
“These new investments mark HSBC’s continued efforts to capture high-growth opportunities in Asia, particularly in mainland China, the region’s biggest wealth pool and one of the world’s largest insurance markets,” said Greg Hingston, HSBC’s head of wealth and personal banking in Asia-Pacific, said in the statement.
Regulators including the People’s Bank of China announced in June the kick off of a long anticipated program called Wealth Management Connect, which will allow residents in Hong Kong, Macau and southern China to invest across the border.
HSBC’s push for wealthy clients dovetails with Chief Executive Noel Quinn’s plan to deploy more resources into Asia as the group cuts jobs and underperforming businesses in Europe and the U.S. as part of a massive overhaul.
In a statement on its official WeChat account last month, the London-based bank pledged to continue to invest and support the Chinese economy after the local media reported that its layoff plan means that HSBC may put an end to its China business.
Earlier this year, HSBC combined its retail banking and wealth management, and private banking businesses with $1.3 trillion in assets. Its private banking unit said in March that it targets to triple the number of billionaire clients in Greater China in the next three years.
©2020 Bloomberg L.P.