HSBC Private Bank is handing over parts of its Latin American client book to UBS Wealth Management Americas to focus on clients from four core countries: Argentina, Brazil, Chile and Mexico.
The client portfolio it will be transferring consists mainly of clients in Central America and the Andean region, according to an internal memo from HSBC global private banking chief executive Peter Boyles, seen by Citywire Americas.
Up to 40 of its staff will be offered roles at UBS, with the remaining team continuing to provide private banking and investment management services to those clients in HBSC’s four core markets.
According to sources familiar with the deal, UBS could stand to add as many as 20 private bankers to its rankings if they all agree to move over from HSBC.
'This decision reflects a refocusing of our strategy on those Latin American markets where we have existing scale in our portfolio and where we have identified growth opportunities for our Private Banking business, in particular Argentina, Brazil, Chile and Mexico,' Boyles said in the memo, the contents of which were confirmed by a HBSC spokesperson.
He adds that the agreement completes the private bank's 'strategic repositioning' to be more closely aligned to the larger group.
HSBC’s new strategy will continue to be primarily led by teams in its Miami office, which is managed by George Crosby and reporting to Joe Abruzzo, head of global private banking Americas, said the memo.
A source familiar with the business said HSBC's Miami office had around $5 billion in assets under management from Central American and Andean clients at the end of 2015.
A spokesperson from UBS declined to comment.
HSBC did not have private banking offices in Latin America, as all clients in the region were booked through its offices in Miami and New York. The agreement does not impact other HBSC businesses in the region.
HSBC's decision to cut ties with ‘less scalable’ Latin American countries follows a trend among a number of global banks and wirehouses of finding ways to reduce risk and increase profitability.
The number of big US-based banks servicing non-resident clients has shrunk over the last two years.
In October 2015, Swiss bank Credit Suisse closed its private bank in the US and transferred its Latin American business to Morgan Stanley. Earlier that year Merrill Lynch Wealth Management also cut down the countries US-based advisers could service in the region to, like HSBC, focus on the ultra-wealthy in specific countries.
RBC Wealth Management also transferred its non-resident clients to Northern Trust when it exited the US offshore industry in early 2015.