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HSBC Sheds Wealthy Middle Eastern Clients Amid Regulatory Scrutiny
23 Aug
Summary
- HSBC's Swiss private bank cutting ties with over 1,000 wealthy clients from Middle East
- Bank aims to reduce exposure to high-risk individuals after Swiss regulator found inadequate due diligence
- Closures expected to be largely completed within six months
In a move to reshape its strategic focus, HSBC Holdings Plc's Swiss private bank is ending relationships with wealthy Middle Eastern clients, including many with assets exceeding $100 million. According to sources familiar with the matter, over 1,000 clients from Saudi Arabia, Lebanon, Qatar, and Egypt are among those being told they can no longer bank with HSBC's Swiss wealth management business.
The decision comes as HSBC faces ongoing scrutiny from Swiss banking watchdog Finma, which has found that the lender's private bank failed to carry out adequate due diligence on high-risk accounts owned by politically exposed persons. As a result, HSBC is now creating a team to help manage the closures, which are expected to be largely completed within the next six months.
"HSBC announced plans in October last year to reshape the Group to accelerate strategic delivery. As part of this, we are evolving the strategic focus of our Swiss Private Bank," the bank said in a statement. The move is seen as a further blow for HSBC in a region that has become a magnet for wealth managers, as the bank has struggled to keep up with its rivals in the Middle East private banking market.
