HSBC Holdings (LON:HSBA) announced on Thursday that they are going to launch private banking services in Australia soon. When this happens, the group will be able to expand their business operations in the Asia Pacific region.
The services are going to be offered to both family offices and HNWIs or high net worth individuals, people whose investable assets are more than $7.47 million or $10 million Australian dollars. The financial services and multinational banking company seem to have done their research well, as there are about 29,500 homes in the country with a net worth of more than $10 million Australian dollars. HSBC drew out this data from the Australian Bureau of Statistics. It is last year’s statistics.
In the Asia Pacific region, Australia has the third highest population of HNWIs.
Chief Executive of the business in Australia, Tony Cripps, said, “Australia is a priority growth market for HSBC, and having a private bank office here will complement and enhance our existing retail, commercial and investment banking businesses”.
Tony added by saying that private banking is only a natural step for them after the business has grown strongly in the country in the last five years.
HSBC Holdings Can Expect Stiff Competition in the Space
However, the group is likely to see some competition in the country, so the going may not be all that easy. There are private banks, wealth managers, and stock brokers that are operating in this space already, like Credit Suisse. There are also the four large domestic lenders – National Australia Bank, ANZ, Westpac, and Commonwealth Bank.
However, historically, banks have found it difficult to succeed in the private banking segment in Australia, unlike the United States.
HSBC expecting to do well in Australia
HSBC, though, is expecting to do well in the country. “We anticipate significant growth from being able to offer a comprehensive private banking experience to both new and existing customers”, Tony Cripps said. He said private banking operations here is going to improve their commercial, retail and investment banking operations as well.
Last year, HSBC had created a mergers and acquisitions advisory group to research and advice such opportunities. It seems like it was this group that decided to move into Australia. HSBC has been looking to expand operations silently in recent times.
Hayden Matthews is going to head the group’s private banking division in the country. He was previously working in the Singapore office of HSBC (LON:HSBA).