by Grace Ng

WHILE private banks have turned cautious in their growth outlook this year, some like HSBC still see the need to selectively hire more bankers now.

This is to position themselves for growth in one to two years' time, especially since talent shortage is still the 'biggest challenge for private banking in Asia', said Mr Christopher Meares, the head of HSBC private banking.

He noted that the 'movement of talent across the industry has come down' this year as growth moderates from last year, while rising inflation has pushed staff costs higher.

But HSBC 'is in a strong position' compared to some of its rivals in Europe and the United States which were severely hit by the sub-prime mortgage crisis and credit crunch, said Mr Meares in a press conference last Friday. The London-based banker was in Singapore last week to meet clients and staff.

HSBC, christened a 'Beacon of Sanity' in a BusinessWeek article last week, moved more quickly than other banks to deal with the loans and write-downs related to risky sub-prime loans.

Its private bank has retained both its clients' trust and money, judging from a recent survey by wealth management consultancy Scorpio Partnership. The survey found that the bank outpaced its peers as its US$494 billion (S$674 billion) worth of assets under investment grew 21 per cent last year.

The market is cooling off after the past few years of heady growth in 'an extremely hot market', said Mr Meares.

But currently, HSBC is still expanding its team to support its growth in the coming years, as it usually takes about 12 to 18 months for new private bankers to settle in and start contributing significantly to the business, he added.

The bank is leaning towards grooming private bankers from within the organisation. It is looking at staff from units such as corporate banking as this is less costly than poaching veterans.

Moreover, clients 'are becoming more discerning' and are less likely to move their assets to a rival bank when their relationship manager jumps ship, he said.

Mr Meares added that he sees a 'very good long-term future' in the Asian and Latin American regions, where the burgeoning numbers of wealthy entrepreneurs can tap HSBC's expertise in both wealth advisory as well as commercial banking.

Ms Monica Wong, the chief executive of HSBC's private bank in Asia, noted that these clients are taking a greater interest in

HSBC's trust services as they seek to transfer their wealth to the next generation and ponder philanthropic initiatives.

graceng@sph.com.sg