Why HSBC Is Betting Billions on Britain's Rich--Just as They Start to Flee

HSBC Holdings Plc HSBC is stepping on the gas in its UK wealth business. The bank just opened its first luxury wealth center in London's St. James's, with another 50 rolling out across flagship branches this year. It's not just about fancy lounges and art-decorated roomsHSBC is hiring 200 new bankers to serve everyone from the comfortably affluent to the ultra-wealthy. The goal? Double its UK assets under management to 100 billion by 2028. Christopher Dean, who heads up wealth and personal banking, summed it up: We're going all out.

But the timing's tricky. The UK's scrapping of the non-dom tax regime is rattling its wealthy class. Labour's move to tax foreign assets of wealthy residents goes further than previous proposals, and the fallout is already showinghigh-profile names like Checkout.com founder Guillaume Pousaz and Egypt's richest man Nassef Sawiris have reportedly left the UK. Critics argue the policy shift could hurt growth and scare off investment, even as the government bets it could raise 33 billion in new revenue. HSBC isn't ignoring the turbulence. CEO Charles Boulton acknowledged a dip in new arrivalsbut he's not backing down. The opportunity remains, he said.

What's driving this bold bet? Stability. Like Goldman Sachs and other global banks, HSBC is leaning deeper into wealth management to reduce earnings volatility. It's a strategy that's worked in Asia, and now the bank's transplanting it to British soil. From revamped lounges in Leeds and Leicester to private events hosted in its St. James's center, HSBC wants to be the go-to hub for UK-based millionaires. And despite the policy headwinds, management still sees Britain as a magnet for high-end financial services.