HSBC is sharpening its focus on the Swiss private banking market
April 14, 2003 2:23 PM GMT (Datamonitor) - With increases in both client assets and profits, HSBC Republic Bank (Suisse) SA stands out from the deteriorating fortunes of many European wealth managers. While market conditions may slow progress, the continued focus on developing alternative investments and exploiting synergies with the HSBC group now looks set to expand the bank's footprint in the Swiss market.

Rising profits have been a rare sight among Europe's private banks in 2002 as they have toiled with volatile market conditions, subdued investor confidence and fierce competition. However in the face of these challenges HSBC Republic Bank (Suisse) SA has been able to achieve significant net new money inflows and growing profits.

Client assets rose 16% to CHF86.8 billion at the end of 2002 and underscored a healthy profit of CHF218.5 million. This compares to CHF180.8 million for April to December 2001 and outshines the HSBC private banking business as a whole which saw operating profits decline by 14.6% last year.

HSBC Republic has had to work hard for these gains, exploiting its global reach to bring in new clients from the Middle East, Africa and Latin America, which contributed CHF4 billion in net new money.

It has also been the beneficiary of the transfer of existing clients from Hong Kong, Singapore and Nassau units that were integrated in the second quarter of 2001. Assets themselves have also been lifted by performance gains in hedge funds, bonds and the Asian market in general.

HSBC Republic also has plans to improve its visibility among Switzerland's wealthy elite and is aiming to launch four new Swiss-registered hedge fund products in the very near future.

While the bank recognizes that the going remains tough and is uncertain about its own target of raising client assets by CHF10 billion in 2003, its response to current market pressures is certainly on track.

The ongoing development of hedge funds and structured products is highly positive given that for many wealthy investors these products continue to be a popular antidote to the falling stock markets and low returns available from more conservative assets classes. Leveraging the group's global network and resources for referrals is also a key imperative for wealth managers if they are to acquire new customers cost effectively.

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