HSBC sees private banking headcount up

GENEVA (Reuters) - Europe's biggest bank HSBC Holdings (HSBA.L: Quote, Profile, Research, Stock Buzz) expects to build its wealth management staff by at least 10 percent annually for the foreseeable future, despite rapid industry growth creating a shortage of private bankers.

Chris Meares, who will take over as CEO of HSBC Group Private Banking at the start of next month and is currently head for the UK, Channel Islands and Luxembourg, said at Reuters' Wealth Management Summit that rapid growth had put pressure on the industry but prospects were strong.

"Because of the growth over the last three years you have seen some pressure on the pool of talent. But there's no doubt that people are part of the fuel that's needed to increase your business."

Meares said wealth management was the fastest growing part of HSBC's business, a trend seen across banking. HSBC Private Banking currently employs 6,500 globally.

It had $305 billion in client assets at the end of June and ranked as the world's eighth biggest wealth manager in 2005 by invested assets, according to research by Bear Stearns.

The bank rebranded its service for high net worth customers as HSBC Private Bank in 2004 and the unit's profits hit $600 million in the first half of this year, up 30 percent from the previous six months, but still representing just under 5 percent of HSBC's group profit.

"Although it's only 5 percent of the group's profit we'd love it to be 10 percent, it just depends on the pace of growth in the group. But it is the fastest growing bit of the business and that's why we are putting a lot of resource and attention to it," Meares said.

Acquisitions have swelled the headcount and the contribution of private banking and could continue to do so.

Meares said the private bank tends to benefit from group purchases, such as Republic National Bank of New York in 1999, which often include wealth management businesses, although it would also look at bolt-on deals of its own.  Continued...