HSBC adds to long list of axed private bankers

HSBC joined the long list of banks reducing their wealth management staff this week when it cut 100 positions in its private banking business in Hong Kong. The layoffs amount to 8% of HSBC Private Bank's 1,200 staff in Hong Kong.

"Changing market conditions have affected business volumes and have led private banking to review its business to ensure it remains competitive and well-placed to serve its clients," says Vinh Tran, a spokesman for HSBC.

The layoffs are across levels, from assistant administrators to managing directors, say sources, and encompass both front-office and back-office staff.

While HSBC's private bank made a profit of $1.4 billion last year and managed $352 billion for clients, the unit's profits in Hong Kong fell 22% to $237 million. And with both assets under management and product sales continuing to drop, it's not entirely surprising that HSBC is trying to pare costs to enable it to weather what looks set to be a difficult year, say specialists.

HSBC is not alone in facing challenges in private banking. Yesterday, while declaring earnings for the first quarter of 2009, Morgan Stanley said wealth management revenues fell 20% over the same quarter last year due to lower asset management and transactional revenues. "Lower asset management revenues reflected a decline in client asset levels; lower transactional revenues primarily reflected reduced levels of market activity and a decline in underwriting revenues," said Morgan Stanley in its earnings release.

And given the market conditions, such cutbacks are becoming part of a larger trend in private banking. Starting in November, Citi fired around 150 people from its wealth management unit in Asia excluding Japan as part of a global restructuring in which it cut 52,000 jobs. In December, when Credit Suisse said it would cut 5,300 jobs, folks in private banking were not spared.

On April 14, UBS Wealth Management said it was getting rid of approximately 240 jobs in the Asia-Pacific region. That amounts to about 7.5% of UBS's wealth management staff in Asia-Pacific, or about 3% of UBS's employees out here. 

In February, Deutsche Bank let go of roughly 60 people from its private wealth management team, across Hong Kong and Singapore. And in March, Societe Generale cut just shy of 10% of its Asia (excluding Japan) private banking staff.