HSBC's Swiss bank reports outflows from hedge funds

Date: Wednesday, September 2, 2009
Author: Warren Giles, Blomberg News

HSBC Holdings PLC's Swiss private bank said clients withdrew money from its hedge funds business in the first half and made deposits with rivals offering higher interest rates.

Clients withdrew a net $4 billion, the Geneva-based unit of HSBC said.

HSBC took a strategic decision not to pay unprofitable rates on deposits to gain market share, Chief Executive Officer Alexandre Zeller told reporters in Geneva. "It's been difficult to understand how rivals have been able to pay 50 basis points or more than us."

Over the next two years, Zeller expects some foreign banks to sell their Swiss businesses. That may provide some opportunities for his bank, which completed its consolidation with HSBC Guyerzeller AG in April, he said.

"There are possibilities on the market that could interest us, even as prices rise in the wake of the financial crisis," Zeller said.