WPR talks to Chris Meares, Chief Executive, Group Private Banking, HSBC

Chris, as the new chief executive of HSBC Private Bank, what do you bring to the role? How do you see the challenge?
I would never rule out an acquisition, but the main challenge for us is to maintain our organic growth rate (around 25% per annum over the last four years). The Group likes that, and sees us as a fast growing business. Why was I chosen to head up the business? I have had 26 years of experience with the Group, across a range of business lines (including commercial and retail) and in lots of different countries. But crucially, I also have private banking experience. So rather than looking outside for an industry expert, I was chosen as someone who would ensure connectivity with the Group.

In business terms, a case of continuity or change?
Mostly continuity. It has been a successful business, and I don’t believe in changing things that are working well for the sake of it. We have however updated and fine-tuned the strategy that we put in place in 2004 (our Affirmation Strategy). There hasn’t been radical change, but we have made subtle changes to the focus of the business, bringing it in line with the Group’s Seven Pillars. As the new Chief Executive, Mike Geoghegan is pursuing our Managing For Growth strategy, but he also introduced Seven Pillars to bring some focus on the business. We have aligned the Private Bank with this. This year is all about bedding down some management changes – we haven’t had wholesale change, but there have been one or two important changes – and investment in the business. Investment is taking place in three key areas - marketing and communications, systems, and people – in order to position us to achieve our five year strategy.

You mentioned the Group’s new chief executive, Michael Geoghegan. What are the implications for the Private Bank?
I now report to Mike, and he is very supportive of the business, reflecting the fact that it has been the fastest-growing Customer Group; it caters for the Group’s most valuable clients; and it has a decent return on equity. As a result, analysts and institutional shareholders probably give it a higher p/e than some of our other businesses. Mike also has a certain style of management – he gives me direction, then says “get on with it”.

Does Mike herald a change of focus? There have been subtle shifts relating to the Seven Pillars, but service is still top of the list. Also important is employee engagement, and Mike is very keen to ensure we measure this, and we have a big employee survey going out across the Group. He wants to be able to measure and benchmark the business much better around the world. We will also see continued investment in the brand. Mike is no different to previous leaders, in that he is global, he has been with the Group for many years, and, for him, the brand and our reputation is the most critical thing.

The present Group strategy calls for the Private Bank to "serve the Group's highest value clients around the world, utilising the investment already made". As for the future, more of the same or meaningful changes in direction?
When we first put that into the Managing For Growth strategy, at end-2003, it was about recognising we had made some big investments – in Republic, Safra Republic, CCF – and we had experienced three years of bear market conditions, where our profits were relatively static. So the emphasis was on getting the most out of the investments we had made. Four years on, we are in a different position. The Private Bank is there to look after our most valued clients, many of whom also have a commercial banking relationship with HSBC. Our relationship with those clients can have a big impact on what they think of the Group.

In terms of the investments, we have made good use of them, and are looking to continue to do so. Our expenses rise by $150-200m a year. This goes primarily into new hires (mostly front office), marketing communications (Mike wants us to spend 2% of non-Treasury revenues on marketing), and IT systems. That is our ongoing investment in organic growth. In addition, we are looking at how to build up our onshore operations – new units where HSBC has an existing presence. That is where a lot of the new investment is going.

Do you see any threat to private banking remaining one of the Customer Groups?
I don’t see it as a risk. We are down to four Customer Groups now, as Consumer Finance and PFS have been merged into one. We are run as a global business, as is Corporate, Investment Banking and Markets (CIBM). While we may only represent 5.5% of the Group’s pre-tax profits, Stephen Green, the Group Chairman, continues to be Chairman of our private banking holding company to emphasise the importance of this Customer Group.

As for products and services, our strategy is to provide the best product to our clients. I have had many discussions with the asset management side, which produces many good products (such as the BRIC China and India funds). Where we aren’t necessarily so strong in the asset management space is in mature European and US markets, we look for the best products outside. Our clients expect an open architecture so that we can serve the ‘best of breed’ for them.

There have been a number of changes to your senior team, both in regional and functional terms – what was the thinking behind this?
One or two have been deliberate changes; others are down to circumstance. I inherited eight direct reports running businesses, and ten functional people. The eight regional heads have been in place for a long time, and the one change was Gerard Aquilina, who went to Barclays. He wanted to move back to Europe, we didn’t have a role for him, so understandably he decided to move on. But he did hire a first rate successor, and we were delighted when Marlon Young, most recently at Citigroup, took over.

We have made a few changes on the functional side. Key for me was the appointment of Nigel Webber as CIO. It was a question of building a team for the next five years, and considering who I could work really well with. Nigel had been in our business a number of years, previously working with Republic out in Asia. He has taken over, and returns to the UK in April. We have also reverted to having a global head of marketing and communications, hiring Tony Joyce from Dunhill for the role. Tony understands the high end segment of the market, but looks at things differently. We have also appointed a new global head of IT, taking on the former head of asset management IT.

In the US, someone who was recruited from Citi has replaced someone who was ex-Merrill, and the UK/CI is now headed by someone who was formerly at JPMorgan. For a Group that prides itself on growing its own, what is this telling us? Are there risks for cultural cohesion?
I don’t see a risk. The first three or four years were about changing the Republic culture into the HSBC culture. About three years back, we could safely say that cultural transformation was complete. I believe that the HSBC culture is strong now throughout the business, and we can absorb people coming in from outside. Unlike retail or commercial, we weren’t big in private banking until relatively recently, so we don’t necessarily have all the talent or experience in-house. We have grown our own, and converted people from other business lines. But we do keep hiring in – we have to - because this business is so fast-growing.

As you know, Clive has gone on to run insurance, while Mark McCombe, who we had brought into the UK, has gone on to run asset management. Having two private banking people in such major product areas is a real boost for us, and strengthens the dialogue I can have in terms of how we can deepen the synergies between our businesses.

With the Private Bank, there have been elements of a federal approach. Will this continue?
Because of our size, we are one of the most tightly-knit global businesses. 85% of the business is legally structured under the Swiss holding company. But the reality is, in markets such as Asia, you have to have someone like Monica Wong, who knows the business really well, and allow her to get on with running the business. Likewise for the US, you need someone imbibed with the local market culture. Europe has always been a slightly different issue. We have two distinct businesses – international offshore, and then onshore businesses in Germany, France and the UK. They are quite different entities and businesses, and they connect to different constituencies. That is why it will always appear to be more federal. But my job is to bridge that. We have an Exco, which meets frequently and is in frequent touch.

How satisfied were you with performance in 2006?
The whole industry had good results, but we came out near the top in terms of growth, which we have to be satisfied with. We saw 33% growth. There were some one-offs in there, and our shareholders would hope that those will continue – there is always going to be something that comes along. But we tend to look at the underlying growth, which was more like 24-25%. Revenue growth was strong, as was cost growth – we were investing in the business. We had a Big Hairy Audacious Goal of hitting $1 billion in 2007, and we hit it a year early. So we were very satisfied.

In terms of offering, is the overall quality where you would like it to be? Areas for development?
We have transformed ourselves from a business that was just about bringing in deposits to a business that can offer a wider range of services and value to our clients.

There are still some key areas to fill out, including private equity and real estate and particularly if HSBC is a principal investor in the funds. This is a small business, but the Group is investing capital in the principal investments arena, and we will piggy-back off that. We have always found that if we are investing, clients like it and want to participate. But it’s about finding specific areas where clients aren’t getting access, for us to provide - emerging markets, infrastructure in emerging markets, long-term investment. We have a number of launches of products coming up with the Group, as well as third party providers. We have also brought in some good hires into the real estate space. We have always helped our clients with direct investment in real estate, but in terms of funds – both long-term private equity style, and short-term funds - we needed a better offering. Again, we have quite a few new launches coming out shortly in this space. We have included these areas within our Alternatives business. We have a great funds of hedge funds business, and we have a model there that can help us to create product for our bankers across a broader range.

Corporate finance solutions are also of increasing importance to our clients. The really wealthy, who have made their money by growing companies and selling them, often want to invest in other big companies. We are now working closely with CIBM to provide such solutions. This is an area of specialism particularly among the bigger investment banks. And we can do more, again with an emphasis on emerging markets.

A few years back, the Private Bank launched a number of specialist advisory teams. The perception is that these have met with variable success. Is this a fair assessment?
Some have done well; others have not been so successful. Strong performers have been Diamond & Jewellery, Media (to which we added sports), and Corporate Finance Solutions (which has gone from nothing to being a significant generator of fees for the investment bank). The one we have effectively exited as a practice, although we still have lots of clients in the sector, is Shipping. The idea was to match up with the corporate bank, but we found that, while it was good to have that industry knowledge, the clients themselves were still private clients who wanted institutional pricing. It wasn’t about having a shipping practice to bring those clients in; it was about what investment offerings we provided.

Family Office services complement our trust business. We are building out this service, particularly in Asia, where it goes down very well. The four key elements are: advice on family succession and governance, philanthropy, asset allocation, and trust and company administration. It has taken us time to figure out what clients want most. Everyone has gone into this space, but few have succeeded in creating value for the client families.

How important is the UHNWI segment, and how satisfied are you as to your capacity to compete in this space?
I have said we need to work this segment more effectively, deploying virtual teams, with the relationship manager working closely with our estate planners, corporate finance solutions, investment advisory and so on. It’s not about being hung up on return on assets under management. It is about service, gross revenues and how you process that. Billionaires want a strong balance sheet from their banks, but they also want good service. And they will have different advisers – investment advisers, lawyers, tax accountants and so on. But the bank can provide custody, banking, FX, administration, and we can add more complex services from there if required.

They will use a range of advisers. They may have a core investment adviser, who they use to help them select managers, for example. But very few have one core adviser, most will have two or three. But we would expect to be on the list – we are AA rated, have an international footprint (UHNWIs tend to be international) and we can handle a wide range of their personal and corporate requirements. We are certainly not held back by being seen as a big commercial bank – amongst HNWIs, that is what they are looking for in many cases.

Wealth Solutions has been a key theme, and you formerly had specific responsibility for this area. How satisfied are you with the present state of play?
I was involved in this business first in the Channel Islands, then running it globally. And I think we have got one of the best spread businesses: 18 jurisdictions, with people on the ground in most of them, and a strong team of wealth planners who can provide advice to RMs and clients. This sets us apart from most other banks – there are other providers out there, but many are independent. Where we have always been different from most other private banks is that this is not just about wrapping our own assets. We take the fiduciary view that we must also use third parties, and we will take in a broad range of assets, including real estate, planes, yachts and so on into these structures.

How satisfied am I? We have a great business in Asia, which does really well. We have a strong Channel Islands / Bermuda business. And the one bit that we are keen on in the longer term is getting the Swiss business going. That is why we put the two trust pieces together in Switzerland last year – from Guyerzeller and our own business. Guyerzeller has always been good in the trust space, and putting the two together gives us real critical mass, with some 80 people. We think we are well placed now to turn that business into something meaningful.

The ability to capitalise on internal linkages within the Group is clearly an important driver. What form is this now taking, and how much more potential is there to realise?
I think the potential is huge, and it’s one of the reasons I’m in the job. Looking back, we were slower than some of our competitors in the UK, for example, in tapping into the Group client base. Five years ago, we were only just starting. That was partly because we weren’t investment-oriented in the UK, and we needed an investment offering before we could get going. In Asia, we were further down the line, with a large number of commercial clients also having a personal relationship. But, overall, we are just getting started. To give an idea of the potential: around 20% of our net new money last year came from Group referrals, up from next to nothing four years ago. As for the other 80%, clearly the brand helps, but a lot of it is client referrals, or our people going out there and winning the business.

The Swiss business continues to crank out the numbers. In terms of generating incremental business for the Group, what are the bright spots and priorities?
Firstly, we wouldn’t be where we are without a strong Swiss platform, and that is what Safra Republic provided us with. We are now the third largest private bank in Switzerland. If you include Guyerzeller, the Swiss business is 30-35%, and including the branches of the Asian business it goes above 50%. We can use this in product development. When we bring in the next generation of systems, we will put it into Switzerland, get that platform right, and then use it for many other areas.

There has been a tendency to question the long-term future of Switzerland, but it is still a very relevant place to have your operations, particularly for some of the growth markets. Confidentiality clearly helps, but it is mainly because there are a lot of skills there. It has the biggest pool of talent in the industry, and we can leverage this in developing the business.

Strong growth in hedge funds, and increasingly institutional. Fit with private banking?
The alternatives area includes mainly funds of hedge funds, and hedge fund expertise. It has gone from $13 to $40 billion under custody. The main advisory team is based in Switzerland. We use four search teams, who do research and screening, in New York, London, Geneva and Hong Kong. We now have people who can do discretionary and advisory mandates in those four territories. They all work off the Swiss team, which is the business hub. And that’s the exciting bit – until recently, many banks, ourselves included, had done a lot of work on the custody side, but in many respects we didn’t charge the client for that advice. Now clients are happy to have an advisory or discretionary mandate, focused entirely on hedge funds. They want help choosing the best hedge funds - there are so many now, and it is a highly opaque area for an individual to navigate.

Because we have that centre of excellence, the only one in the Group, it would be daft to ignore the institutional side. But I am very strong on the fact that, if we are going into institutions, it must be hand in hand with CIBM, who own the institutional relationship. We are just one product. When you go into a major institutional authority, they want some hedge funds, and it would be difficult to break up the team in terms of research – the same team that researches a hedge fund is as relevant to an institution as to a private client. That is why it is together. It is certainly fast-growing, but it is not the largest part of that business, and, to repeat, we work closely with CIBM.

With regard to Guyerzeller, there has been a move to combine trust operations and also to explore sharing IT etc. Any plans to fully integrate?
We think there is a compelling case for a standalone boutique brand, sitting alongside the flagship brand. We completed our strategic discussions a few weeks ago, and the conclusion was that we should keep the brand as a separate legal entity, while finding a way of marketing the service as a complementary offering in parts of the world. It is one of our oldest private banking businesses. Going forward, while keeping the brand and identity, we are looking at moving to one operating platform. It will be known for a particular style of service, as a more traditional Swiss private bank, offering more of a gestionnaire / fund manager service. It is also seen as a good place for trust and family office services.

Asia is an intensely competitive region. Given the Group's strength, are you satisfied that you are maximising the opportunity?
Over the last four years, they have had a phenomenal run, growing the business at over 20% per annum. There was always going to be one year where you have to digest a bit, and last year was it. Stripping out some of the one-offs, we are still around 15% up, but it was definitely a year of taking on people and investing in the business. We all believe that it can get bigger, but I don’t think we punch below our weight. Everybody is coming into the market, and there are not enough private bankers to go around. So we are looking at how to grow talent, or make use of different skills we have. We recently hired a retiring international manager, for example, who has been in the Philippines for many years, and knows our major clients locally in the family office space.

Another area where I would like to do more is in relation to wealth creation through IPOs. That is right on Stuart Gulliver’s, and CIBM’s, radar screen. We are investing in being a financingled emerging markets business. China is a good example. A lot of the IPOs were big banks, who see HSBC as a major competitor. We didn’t win the IPOs. Those of our clients who wanted a piece of the IPO moved their money to the bank doing it. Once they sell out, we probably get some, but not all, of the money back. So we have lost out a little bit in terms of IPO activity. But where the Group is involved, we have been an excellent distributor, with strong interest among clients.

For Asia, what are your onshore designs? Do you have the flexibility to do all that you would want to do in this respect?
Our five year ambition for Asia is one of our biggest: to build the onshore business where HSBC is present. We probably don’t trumpet what we are doing there enough, as we are beavering away trying to build these businesses. We have Asia onshore private banking operations in Japan and Taiwan. Hong Kong and Singapore are onshore and offshore, with more in relation to the former. We keep reviewing other markets, and will move when the timing is right. Again, China is a case in point. We are doing as much as we can in China, and we want to be at the forefront as the regulatory landscape shifts. We will open a private banking service in China this year, along with HSBC’s own developments in 50-odd branches. We also have a rep office there. It is more about building those offices out than having a huge network, and we are developing this all the time. At the moment, within the Private Bank, as a foreign bank, we will be able to offer deposits and mortgages, but we can’t provide some of the broader product range onshore. We found exactly that in Malaysia, where the Premier service was the limit of what the regulations would allow you to do. Taiwan is now looking more promising. Japan we have been working at for five years, and we have 70 odd people there. Regulations are changing a bit, and regulation is invariably a key driver in many of these countries.

The other onshore Asian market at present is India. We now have six offices with 70-odd people. We have developed this with HSBC, doing a top-slicing segmentation and developing onshore private banking operations. It was profitable within its first year: great start, although still lots to do, and a hugely competitive landscape. It does not contribute a significant amount of our profit, but for all onshore businesses there will always be international spin-offs. Clearly, both India and China are major markets. At the moment, India is providing more opportunities already, because there are some entrepreneurs doing big deals, and the regulatory environment is at present more open to onshore opportunities. We have started at $500,000 investible, because in India that goes a long way. But for HSBC, China is clearly a big play. Everybody is after that business, but we are the most recognised foreign financial brand in China, and the Chairman and others spend a huge amount of time there.

The Middle East is also fashionable, but how well do you think private banks are reading the opportunity? To what extent does the breadth and depth of HSBC in the region provide the Private Bank with a competitive edge? What are your present priorities in the region?
Five or ten years ago, we were missing out by not fully exploiting our franchise in the Middle East. I spent eight years in the region, and I know that, sadly, while we were helping clients to build their commercial businesses, we often didn’t capture private banking. We had huge potential to capture a bigger share of that wallet, and we are now doing so. We have always captured the larger tickets, but now we have the right programmes to incentivise the commercial banker to refer. And in this region, it is important to also have an onshore operation – clients will look where the best returns are, and two or three years ago the local stock market was where they put their money. You have to be able to provide local real estate, for example, and not just pick up their international investments. We now have 50 people on the ground in Dubai, and we’re building the onshore platform as well. We are a serious competitor, and I see massive potential for us there.

In the US, the focus seems to be on UHNWIs. In this respect, it is similar to many other players, but are you playing to your strengths and what is going to set HSBC Private Bank apart?
The US is one of our most challenging markets. It is the most developed, and brokerage margins are much lower than elsewhere in the world. We are not in the brokerage business, so it is about how you differentiate your offering. We have a fantastic business in Miami, mostly driven from Latin America. We also have a good international business in New York, looking at servicing people who are investing in New York, or work or live there.

But if you look at the pure domestic business, we have had to cut our strategy slightly differently. We have looked at various segments, such as the media. We are working with our network in New York state, and hooking up with its commercial clients at the $5m+ level. We can do well in that space. The other strategy has been to open up regionally in places like West Coast, Chicago, Boston, Washington, effectively following HSBC. The strategy in commercial banking and real estate has been fairly internationally driven, looking at companies, businessmen who are doing international business and then we will help them. US banks domestically are strong at what they do, but not many of them get the international aspects. We still have to position ourselves better, and capitalise on our ability to provide access to investments in emerging markets. Because the regulatory position is very different, we have to ensure we have the product, register it, and ensure our systems cope with it onshore. We can grow our business comfortably if we get that right.

For Latin America, are you punching your weight? Present level of ambition onshore?
The onshore business is mostly going to be in Brazil and Mexico, where we will be building on businesses that are already profitable. Panama is going to be interesting from an onshore and offshore perspective. I think people in the region will use Panama, as well as Miami, as an offshore centre, and of course HSBC has just bought Banistmo, the largest Central American bank. Our regional CEO is very enthusiastic, and positive about building the onshore private banking business. But offshore will remain a factor. People still want to diversify their assets, and it is a good sized business for us. We will be running that as a region, in the same way that HSBC as whole does. There will be foreign competition that is bigger in an individual country, but when you look at the region, HSBC now has the largest regional franchise of any foreign bank.

In France, the integration of the different private banking strands has not been entirely smooth. Are you now through this, and what of the future?
Real stand-outs in Europe in terms of performance over the last few years have been the UK, Germany, Monaco and Switzerland. The Channel Islands have also done well. In France, Christophe de Backer has done a good job of turning it around, but we all accept that it was a big challenge to bring four different private banks together, put them in one building, and rationalise the systems. We are right in the thick of the systems work at the moment. Christophe has also done a great job of connecting with HSBC in France, which always had a franchise which was more upmarket than a standard, run of the mill retail bank. Last year there was a great pick-up in referrals.

We have always had good asset management product, localised for the French market. We have got everyone into one building (apart from Louvre Gestion). But we are still bringing the total picture to it. Profit-wise, it has been turned around, and Christophe has worked wonders, but he would be the first to say that there is a way to go to get it to the level of, say, the UK operation.

In the UK, you have been opening regional offices, although the scale of these has tended to be smaller than many had imagined. What is the logic?
The UK private bank, including a bit of the old James Capel, made around £85m pre-tax profit in 2006. That makes it one of the largest private banks in the UK in terms of domestic operations. Lending to private clients and real estate has been important to us. All this time we have been building out the investment advisory side of the business, and we are now there in terms of critical mass.

So how would I characterise the UK private bank? This is still a private bank for wealth creators. It is still relatively young at twenty years or so. It is still seeing 40% compound growth. The move out into the regions was a natural extension for us. There wasn’t much point in doing so when we were primarily doing lending and banking. But the development of our investment service provided a spur, and the Group wanted us out there. Our referrals programme was showing that our people were on the road, having to travel out a good deal. The first few places were no-brainers, based on the Group’s customer base. We opened in Leeds, Manchester, Birmingham, Cardiff (less obvious, perhaps, but HSBC has a big presence there), Bristol, Edinburgh (a tougher one, as we are not so big, but an obvious choice), and Dublin. But these aren’t huge presences, as we aren’t building infrastructure. We sit in the HSBC offices, with the corporate and commercial bankers, with Premier to provide a banking service if needed. So it was more about providing marketing and a relationship management service. The average size of the office is probably around six people; I see us building on that, but only perhaps to double the size. We will also be putting a team into the City. For me, it is better that we get it right, and we are not ever retrenching. Better to choose the places you really want to be in, rather than hitting the headlines for going to a larger number of places. In addition, HSBC is opening a number of mega-stores, and there will be a place in there for private banking – where people can meet someone and talk about the service, even if we are not servicing them from that office.

Trinkaus & Burkhardt has come closer to the Group. What does this mean for the Private Bank?
Progress has been really encouraging. There was clearly a major change, with the shift in limited liability of the partnership a year and a half ago. There is still an associate owner, with one of the Landesbanks owning a minority. But we have moved closer together. We have some representatives on the Swiss holding company from Germany. Sieghardt Rometsch, who has run Trinkaus for many years, has also been on our private banking board, and is a good sounding board. And Olaf Huth, the MD who runs the private banking business, is very much engaged with us now.

A lot of people are interested in Germany. We have a private banking business there that makes US$ 45-50m a year. Not many people have been able to go in and establish that kind of profitability. So they look after domestic German clients, but we also enjoy good connections: they are marketing the funds of hedge funds business, they are producing real estate product that our clients want to buy into the German market.

Your thoughts on organic versus acquisition?
We are planning for organic growth, as the market looks a bit frothy at present. There’s only a few businesses that might be for sale, and the multiples being demanded are pretty steep. In many respects, it’s a good time to be a seller (not that we are!). I think we are just going to see how the market pans out. If it cools down, we are clearly there. I think HSBC has been a good home for the companies that HSBC has bought, and if entrepreneurs, particularly some of the family owned companies are looking to sell at some stage, hopefully they will think of us. In some cases it may be about broadening our product range, rather than adding to our client base. So it could be relatively small M&A, like PropertyVision, for example, which has been a great success (we recently opened an office in the South of France, and are looking at how to broaden that out), and gave us something else to talk about with our clients.

In marketing terms, the Private Bank dispensed with a business-wide head of marketing in late 2005, but a year later seemed to have had a change of heart. Thoughts on the optimal marketing approach and mix?
Raising the game on brand marketing is one of the key elements within our seven pillars. The hiring of a Global Head of Marketing and Communications simply reflects this priority.

The previous head of marketing did a good job on the intellectual aspect, working up how we could appear different. Then we said: this is the story, this is the brand “assume nothing” – use it. We have used it now for about four years, and it still has some mileage. You can spend a lot of money on print advertising, and it doesn’t necessarily achieve much. We do more in what I would call the new growth markets – Asia, Middle East, Latin America – in TV and print. In the other markets, it tends to be event-driven. It is about providing clients with money-can’t-buy experiences, and errs on the corporate entertainment side. At the top end, we have found that family forums and Chairman’s Club have been very successful.

Asia and Switzerland do some good things, and it does have to be tailored to the market. What works well in Asia are things like the Armani fashion show: quite glitzy. That doesn’t work so well elsewhere. In Hong Kong, we’ll do a charity gala dinner, and get the Who’s Who of Hong Kong; if you do something here in London, banks don’t draw in that kind of crowd! So there is always going to be that regional element, but I need somebody to keep on top of this space, who gives me some advice and ideas on how we can roll things out and increase our expenditure, and sensibly. What’s being done really well out in the regions? What can we make global? And at some stage, we will spend even more and refresh the branding. But whenever you do that, you need to put in a lot of thought into your positioning. Go to Geneva, look at the adverts, and they’re all pretty similar - you need to do something that stands out.

Thoughts on staying ahead in the battle for talent?
Clearly, you have to be competitive, and we think we are. If we look at our turnover numbers, we are getting the retention piece right. We have got competitive pay. We have used shares in trying to get longer term buy-in. Money is being thrown around in the market, and this could be one of the industry’s biggest risks – in particular, a lot of smaller players are starting to overpay, and when the market turns around they risk being left with excessive fixed costs.

But you also have to tell a compelling story. People must realise that joining HSBC they don’t just have to be a hunter – they can be farmers too, serving the Group business coming in. We are a large, fast-growing business, and the opportunities are there – we try to promote from within, we second, we have a super graduate programme (around 25 a year, with 18 months of training in multiple locations, they are multilingual), as well as a lighter graduate programmes (taking them on for six months training). We also get a lot of people moving from other parts of the Group. And then you have to think laterally.

One of our Seven Pillars is making this the best place to work. It is about attracting, retaining and motivating. We have some great workshops, motivating and learning courses. We have developed talent pools throughout the Private Bank, and manage them actively. And we are having success. We have been growing our headcount by around 9% per annum; with normalised turnover of another 9-10%, you’re talking about recruiting 1,400 people a year, across the world. That’s no small challenge.

Where would you like the business to be in five years time?
Ambitiously, the Group Chairman said we should aspire to be 10% of Group profit. That’s going to take something to get there, but we are 5.5%, and I believe that will grow if we maintain the organic growth that we are targeting. But more importantly, success for me will be getting a lot of the fledgling onshore businesses around the world operating successfully and profitably. That is a big task over the next five years. There are a number of new onshore markets coming onstream.

We are in a better position than our competitors in terms of the starting ingredients, but I will probably be measured on that as much as anything. 

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