Dubai: Global banking giant HSBC, with a focus on the premium segment of the consumer banking business is looking to expand its retail lending, liabilities and wealth management business to a wider audience.
“We are looking at the full corporate employee programmes to expand our retail business. We want to deal with payroll type solutions from both wholesale and retail side, covering liability and asset side of the business,” Marwan Hadi, head of Retail Banking and Wealth Management in the UAE, told Gulf News in an interview.
Majority of the bank’s retail lending is against salaries. Although the bank’s focus is on premium segment of the retail banking, in the corporate employee programme, the bank aligns its lending policies to be more inclusive. However, the bank does not insist on taking on the entire payroll from a customer acquisition point.
“The UAE is a market where customers have wider choice. Although we become a preferred bank for a company through our corporate programme, the customers have the freedom to choose which bank they want to do business with,” said Hadi.
HSBC sees strong potential for retail assets growth. Given the positive economic outlook, the bank sees greater growth in numbers as it gains market share in this segment. As part of its new retail expansion strategy, the bank is investing in digital solutions and frontline staff. The bank is in the process of adding more relationship managers (RMs).
The new retail strategy revolves around the concept of taking the bank to the customers. While a part of it relates to providing appropriate digital banking delivery channels such as mobile banking and internet banking, HSBC is equipping its retail staff with most advanced digital solutions to serve their customers better.
The bank has a network of eight branches and seven customer service units focused on commercial hubs across the country. Unlike many leading local banks that have wider branch network and still expanding, HSBC plans to reach customers wherever they are.
Bank’s new customer acquisitions are based on corporate relationships. “Our customer acquisition numbers in the first quarter this year is much more favourable than last year. We are experiencing more than 10 per cent growth in terms of new to bank customers,” Marwan said. On the lending side, with the exception of auto loans, for all segments such as mortgages, personal loans and credit cards the bank has witnessed double digit growth so far. Hadi expects the bank to keep up the momentum through the year.
“We don’t see any reason why this trend will not continue for the rest of the year. The International Monetary Fund (IMF) expects the UAE economy to grow at 3.5 per cent this year. Our Group is very comfortable with the growth outlook,” he said.
In the cards business, the bank has plans to expand its product suite to complement the existing successful cash back card programme and premium offering like fully metallic black card.
Liability focus
For the past several years retail banking has been largely focused on assets (lending) business. Hadi expects that to change as the interest rates rise. With the rising rates, banks are likely to make more income from liabilities business (deposits).
HSBC with its focus on the premium segment of the retail business has a strong retail deposits base. The bank is currently working on strategy to match retail asset business with its strong retail liabilities business.
Wealth offerings
Bank’s wealth business, focused on premium retail customers will be largely driven by growth in relationship managers as it plans to increase the number by more than 15 per cent this year.
“We have expanded our wealth proposition with a robust investment platform offering more than 75 mutual funds. Currently, we have two GCC funds but going forward we are looking to add more regional funds in our offering,” said Hadi.
In addition to mutual funds, the bank has fixed income products on offer and has plans to add direct equity and exchange traded funds (ETFs) in the future. The bank’s portfolio advisory service offers a goal-based investment advice directly linked to the risk tolerance levels of customers.
Quick payments
HSBC has a very competitive payments business in the UAE. In the foreign exchange (FX) business within the Retail Banking space, the UAE is the third largest market for HSBC Group, after UK and Hong Kong. The bank offers linked accounts for premium customers across key global corridors, allowing customers to transfer money instantly between these accounts. The bank also offers opportunity to link the HSBC accounts of family and friends globally, making fund transfers within the group quick and seamless. Both these facilities are free of charge and are completed digitally to allow improved customer experience.
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Marwan Hadi was appointed the Head of Retail Banking and Wealth Management (RBWM) for UAE in October 2017. He joined HSBC 13 years ago and has undertaken a number of senior leadership roles across both RBWM and Commercial Banking (CMB), including as Managing Director, MEFCO and Head of Business Management, CMB. In his current role he is accountable for leading the entire UAE RBWM business and operations to achieve sustainable growth whilst maintaining the highest standards of control.
