Another major loss from HSBC's private bank in Switzerland weighed down the British firm's wealth management arm. The Swiss unit is grappling with several high-profile tax probes including in the U.S.
London-based HSBC said its private bank in Switzerland posted a $100 million pre-tax loss last year. The loss impinged HSBC's wider global wealth arm, where profit edged 16 percent higher to $344 million.
The private bank's loss, which follows one of $192 million loss in 2017, wasn't explained in HSBC's annual report. An HSBC spokesman declined to comment. Once the largest foreign wealth manager in Switzerland, HSBC has been shrinking in the alpine nation for years.
Revamp Led to Exits
Last year, HSBC lumped its relatively autonomous Swiss bank together with five other private bank units in Europe. The move sparked the exit of HSBC's Swiss head as well as two more high-profile exits several months later.
The Swiss wealth manager is grappling with several high-profile scandals including criminal investigations in the U.S. and Belgium. In 2017, the bank paid 300 million euros ($339 million) to settle a French tax probe. Last year, HSBC flagged charges of as much as $1.5 billion to put past wrongs right.
Management Changes
The Swiss retreat comes as HSBC's wider private bank last year bulks up in Asia, the world's fastest-growing wealth market. In September, ex-McKinsey consultant and Goldman Sachs banker António Simões took over the overall wealth arm, which manages $241 billion.
A short time later, HSBC filled the vacancy left by Franco Morra in Switzerland with the hire of Alexander Classen. The Swiss banker ran the international arm of Coutt's until the sale of its assets to Union Bancaire Privée in 2015.
HSBC's overall pre-tax loss in Switzerland, which Classen oversees as country head, stood at $77 million, narrowing from $184 million on the year. HSBC's commercial banking and its corporate center softened the blow of the 2018 private banking loss.
