HSBC’s Swiss Private Bank Ends Ties with Wealthy Middle Eastern Clients amid Restructuring and Regulatory Scrutiny
HSBC is pressing ahead with a major restructuring of its Swiss private banking business in a move aimed at reducing exposure to clients classified as high-risk. The bank has decided to terminate relationships with a significant number of Middle Eastern clients, including wealthy individuals with assets exceeding $100 million, according to people familiar with the matter.
The decision comes as part of a broader plan announced in October last year to reshape the group and accelerate strategic delivery. In an emailed statement, the bank explained that the strategic focus of its Swiss Private Bank is evolving as part of this restructuring process.
The move coincides with tighter oversight by the Swiss financial regulator FINMA, which concluded that HSBC’s Swiss private bank had failed to perform adequate due diligence on high-risk accounts, including those held by politically exposed persons (PEPs). Last year, FINMA barred the bank from entering new relationships with such clients and instructed it to appoint an external auditor to conduct a full review of the relevant business.
Under HSBC’s updated risk policies, clients with assets above 100 million Swiss francs ($124 million) are categorized as high-risk. The risk assessment is not limited to the scale of assets, but also considers factors such as political exposure and transparency of wealth sources.
This strategic shift reflects HSBC’s efforts to reduce its exposure to complex, politically linked, or opaque wealth, particularly after years of regulatory scrutiny facing Swiss wealth managers.
By exiting a large segment of wealthy Middle Eastern clients, HSBC is signaling a broader realignment designed to strengthen its reputation and reinforce compliance with international regulatory standards. However, this move is also likely to have an impact on the private banking landscape in the region, where Swiss banks have long been regarded as a preferred destination for managing vast fortunes.
