The Hong Kong/London-listed banking group is looking at restructuring its private bank.

HSBC is to restructure its private banking arm following controversy over its Swiss operations, according to the Financial Times.

The report said HSBC has hired Rothschild to manage an overhaul of its global private banking arm, involving the sale of riskier portfolios and some contraction of its global footprint. Further details of any changes were unclear from the story.
 
HSBC declined to comment when contacted by this publication.

The Hong Kong/London-listed banking group has to some extent already made changes. For example, in November, it sold its Bermuda-based private banking business to Butterfield. 

When it was reported earlier in 2015 that some clients of HSBC’s private bank in Switzerland had not declared accounts, the bank stressed that it had already shrunk client numbers and assets under management at the private banking arm from 2008, to remove the risk of undeclared accounts. A former HSBC employee, Hervé Falciani, who leaked information on clients and their tax affairs, was in November sentenced to five years in jail. However, he did not attend the trial and is based in France. 

HSBC disputed Falciani’s claim to be a whistleblower about undeclared accounts, claiming he tried to sell client account information for financial gain. The leak of client account details has prompted a number of governments, such as those in the UK and France, to investigate. It is understood that a large number of accounts affected by Falciani’s activities were closed more than a decade ago. The case also highlights the problem of how a person can raise questions about alleged wrongdoing in a bank when secrecy laws expressly forbid bankers from disclosing their clients’ identities. The leak of client data and the media storm around it were embarrassing to the bank. HSBC’s group chief executive, Stuart Gulliver, took out full-page advertisements in the UK press earlier this year to apologise over the matter. The controversy broke shortly before the UK general election in May, when the issue of whether wealthy persons were avoiding or evading taxes was high on the public agenda.

In early November, HSBC said pre-tax profits at the global private banking arm fell to $81 million in the three months to end-September from $190 million a year before. Assets under management stood at $346 billion at the end of September, down from $370 billion at the end of June this year.