Unlock the Digest of the editor for free
The Swiss Private Bank of HSBC has launched a clearance of more than 1,000 rich customers in the Middle East, because it is confronted with continuous control of supervisors about high-risk customers.
The bank will end its relationship with a whole series of customers from countries such as Saudi Aarabia, Qatar, Lebanon and Egypt – of whom many have assets of more than $ 100 million – according to people who are familiar with the issue.
The Swiss private bank of HSBC has informed customers that they will no longer be able to use its services and send letters that advise them to move their bills elsewhere in the coming months, one of the people said.
Barry O’Byrne, Chief Executive of HSBC’s International Wealth and Premier Banking Unit, said that the bank had an “absolute dedication to both our Midden -East and the Swiss asset activities”.
He added: “Switzerland plays a key role in the way we support customers worldwide – it is one of our core hubs. Our strategy is to make our wealth activities grow considerably and we have successfully done this. This strategy will see continuous investments in both our mid -east and the Swiss service to our customers.”
The changes, which were first reported by Bloomberg News, came to a continuous performance by the Swiss bank watchdog, Finma, on HSBC for its control procedures of some risky customers.
In 2024, the Swiss Private Bank of HSBC was not allowed to accept prominent public figures as customers after Finma discovered that the bank had violated anti-money laundering legislation. The supervisor found that between 2002 and 2015, HSBC had not performed the correct Due Diligence for several transactions in which more than $ 300 million was transferred between Lebanon and Switzerland.
The watchdog discovered that HSBC “had not recognized the instructions of money laundering of these transactions; it also failed to meet the requirements for the initiation and continuation of customer relationships with politically exposed persons, and was therefore in serious violation of the due diligence obligations”.
Finma ordered HSBC to make an anti-money laundering review for all his risky relationships with prominent public clients, known as politically exposed persons (PEPs). Finma said that the bank could not start new relationships with PEPs until it had completed her assessment.
The bank indicates customers with more than SFR100MN ($ 124.7 million) as “high risk” and requires a larger due diligence. A customer’s riskocore also takes other factors into account, including nationality.
Last month, HSBC revealed that the authorities in France and Switzerland investigated “in connection with alleged money laundering of money with regard to two historical bank relationships”.
As HSBC is forced to reduce its customer list, Rivals are strengthening their asset management teams in the Middle East to meet the needs of ultra-high power.
Although HSBC has long dominated the activities of the capital market of the region, it has been left in Private Banking and it has seen the exit of various senior bankers in the division. The Swiss unit hired Aladdin Hangari, who was a senior asset manager at Credit Suisse in 2023, to increase his presence of asset management in the middle East.