by Jenny Ruth
Before the purchase, HSBC’s assets were $3.1 billion.
HSBC head of retail banking Alex Bentley says the bank is going to need to recruit upwards of 60 people to run the combined operation and will be offering jobs to AMP’s existing 35 retail banking staff.
While much of the AMP banking operation had been run out of Australia, HSBC is looking to substantially run its New Zealand business locally.
"The reason AMP has had to sell its bank isn’t because of the people who worked for it. One thing that’s really impressed me … has been the calibre of the AMP people. I would love to bring in many of them because they bring all that intellectual knowledge of the business which is critical to us," he says.
While Bentley says HSBC has been growing quite nicely in an organic sense in New Zealand – assets grew 42% last year, the AMP purchase accelerates its growth strategy by about three-and-a-half to four years.
In the past, HSBC has targeted high net worth individuals and has aimed to be a niche rather than mainstream player.
Bentley says the bank will still be targeting that sort of customer. Between 70% and 80% of AMP’s customers fit into that category and the remainder are "middle or emerging market. From what we’ve seen of the business so far, they look like they’re targeting people who are on the up in terms of income and wealth."
He says one reason why HSBC, which has been operating in New Zealand since 1987, hasn’t grown faster, despite offering very competitive home loan rates, is that it has been careful not to overburden itself.
Given the type of customers it wants, "you have to give them the first class ride they expect, because they won’t come back a second time."
HSBC is buying AMP’s A$1.6 billion residential mortgage portfolio in New Zealand and, subject to customer consent, will take on AMP’s A$355 million New Zealand retail deposit portfolio. It will also enter into management and funding arrangements over a further A$135 million of mortgages. The purchase is expected to be completed by the end of May.
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