HK poised to become world's top wealth management hub

Cici Cao and Bloomberg

HSBC chairman Mark Tucker says he projects Hong Kong to overtake Switzerland in wealth management by 2027-28.

Speaking at the HSBC Global Investment Summit, Tucker said Hong Kong - benefiting from capital market recovery - will surpass the premier European asset management hub and become the world's largest wealth management center.

And as a super-connector between the mainland, Asia and other global districts, Hong Kong will play a highly important role with the continued opening of the mainland market, he added.

It is not the first time that Hong Kong's bank vaults have won over the world's richest people.

Earlier, UBS chief executive Sergio Ermotti anticipated the city to overtake Switzerland by 2027 as the world's No 1 hub for cross-border wealth management.

He noted Hong Kong's wealth management sector was expanding at a compound annual growth rate of 7.6 percent.

According to a 2023 report by Boston Consulting Group, Switzerland was the world's largest treasury center in 2022, managing US$2.4 trillion (HK$18.72 trillion) in assets, while Hong Kong ranked second with US$2.2 trillion. The report expected the city to rank first by 2027, with assets worth US$3.1 trillion.

The report also cited the tightening of Swiss banking regulations after the 2023 demise of Credit Suisse and said sanctions against Russia affect the country's stability and neutrality, which has weighed down its wealth management industry.

As of the end of 2023, assets under management in Hong Kong reached over HK$31 trillion, and net fund inflows of close to HK$390 billion were registered, marking a year-on-year increase of over 3.4 times, according to Secretary for Financial Services and the Treasury Christopher Hui Ching-yu.

Hong Kong also excels in family offices. On Monday, Hui said more than 200 family offices are expected to be introduced to Hong Kong by the end of the year, surpassing the target set in the 2022 policy address.

Over 130 influential family office principals and family members from the mainland, Asia, Europe, the Americas and the Middle East gathered at a principal dinner organized by the government last night to set the stage for the third edition of the annual Wealth for Good in Hong Kong Summit - WGHK - to be held today.

Last week, HSBC unveiled its first commercial wealth center in Hong Kong. The bank said it is tailored to support businesses of all sizes. The center, located in Tsim Sha Tsui, spans an area of 3,000 square feet.

HSBC said a double-digit increase in the number of SME customers engaging in investment transactions in 2024 has proved the growing commercial wealth management demand.

Hong Kong is the "heart of HSBC" and it will keep investing in the city, its chief executive Georges Elhedery told Bloomberg on the sidelines of the summit.

The bank is looking to expand headcount as well as branches after it acquired 800,000 new customers last year, driven by an influx from the mainland, according to Maggie Ng Yeung Yuk-yu, head of wealth and personal banking for Hong Kong.

Elhedery said the lender expects to double down on its investment banking operations in Asia and the Middle East after exiting key businesses in Europe and the United States.

The HSBC Global Investment Summit lasts until tomorrow.

cici.cao@singtaonewscorp.com