HSBC is unlikely to open a branch in Japan over the next year as it takes a cautious stance on outlet expansion in the wake of the financial crisis, Godfrey Swain, the Maltese head of HSBC's personal finance services in Japan, told the Reuters Global Wealth Management Summit in Tokyo.
"Our plans are to consolidate what we have already built in Japan. We have seven very high-profile branches here. We will move with the times, and as the business grows, so will our presence here," Mr Swain said.
Godfrey Swain, previously HSBC Bank Malta's head of personal financial services, was appointed to his Japan post last August. He was replaced in Malta by Andrew Ripley, deputy chief executive officer at HSBC's UK division of Marks and Spencers Money.
HSBC opened its first branch in Japan in 2008 to offer its HSBC Premier service targeting affluent customers with at least 10 million yen in liquid assets.
Tokyo-based Mr Swain has been detailed to develop a premium personal banking service in Japan based on the Premier proposition.
Having walked away from its equity research and trading operations in Japan earlier this year, HSBC will focus on strengthening relationships with its HSBC Premier clients, Mr Swain said.
Mr Swain's comments on expansion echo HSBC's chief executive, Michael Geoghegan, whom the Financial Times quoted on Monday warning about "growing too fast" because he fears a second economic downturn.
Japanese mass affluent investors remain averse to risk more than a year after the financial crisis, still trying to avoid sophisticated financial products, Mr Swain said.
"There is still a preference to invest in yen deposits, but there's equally a strong preference to invest in deposits of foreign currencies as well," added Mr Swain.
Japanese investors tend to like foreign currencies and they have more knowledge about them than investors of other countries. Many customers of HSBC are trying to diversify their portfolio and trying to look for a chance to buy back equities as the economy picks up, Mr Swain said.
Japan represents huge potential for HSBC, as the country is home to more than half of Asia-Pacific's high net-worth individuals, those with $1 million or more in assets excluding their primary residence.
HSBC has estimated the market could support 30 to 50 outlets but has not given an exact target or time frame for potential branch expansion.
"Hopefully we'll have more (branches) in other regions of Japan in future," Mr Swain said.
HSBC said it does not disclose the number of accounts it has in Japan or give figures on the amount of wealth it currently manages.