HSBC sells Japan private bank to Credit Suisse

---

SINGAPORETOKYO, Dec 21 (Reuters): Credit Suisse is buying HSBC's private banking business in Japan, raising its profile in the world's third-largest economy where it began onshore private banking just two years ago. HSBC, Europe's biggest bank, said the value of the gross assets of the business being sold was $2.7 billion as of end-October, but it did not disclose the sale price. It said the sale is part of a strategy outlined in May. CEO Stuart Gulliver wants to cut annual costs by $3.5 billion and sharpen the bank's focus on Asia by quitting countries or businesses where it lacks scale. Asia is a battleground for global and local private banks competing for market share in a region that is fast outpacing the United States and Europe in economic growth. Powered by China and India, Asia-Pacific's millionaire ranks rose 10 percent to 3.3 million last year, second only to the 3.4 million in North America and inching ahead of Europe's 3.1 million, according to a Merrill LynchCapgemini Asia-Pacific wealth report. Asia's combined wealth rose 12 per cent to $10.8 trillion last year to overtake Europe and is closing in on the United States and Canada, where wealth rose 9 per cent to $11.6 trillion. More than half the world's millionaires are still to be found in the United States, Japan and Germany. Asia's private banking industry has seen consolidation recently as the market turmoil dampens growth, and rising regulatory and staffing costs dent profitability. Swiss private bank Julius Baer said in October it was buying the Asian private wealth portfolio of Australia's top investment bank Macquarie Group. Credit Suisse said it plans to expand client coverage through integrating new offices in Nagoya and Osaka in western Japan and aims to boost profitability. Currently the Swiss bank has an office in Tokyo. "This acquisition will strengthen Credit Suisse's private banking capabilities and reinforces its long-standing commitment to offering leading wealth management services in the Japanese market," the Swiss bank said in a separate statement. The acquisition, which needs regulatory approval, is expected to close in mid-2012. HSBC will sell its top-tier Japanese private banking business, which covers clients who hold more than 200 million yen ($2.57 million) in financial assets, said an official at HSBC Japan, who spoke on condition of anonymity.