The lack of talented staff is still the biggest challenge for banks seeking to expand their wealth management business in Asia, said the head of private banking at HSBC.

As stiff competition for experienced wealth managers drives up pay and rich clients become more discerning, HSBC is turning more towards grooming its own private bankers from within, said Mr Chris Meares, chief executive officer of HSBC Private Bank - HSBC's international private banking arm - and head of private banking within the wider HSBC group.

"The biggest challenge for private banking in Asia is probably a lack of talent," he said.

Asia makes up about 25-30 per cent of HSBC's private banking business.

Mr Meares, who is based at HSBC's headquarters in London, was speaking to the media last Friday during a visit to Singapore.

Meanwhile, rich individuals in Asia are also taking a bigger interest in philanthropy, said Ms Monica Wong, chief executive of HSBC's private banking business in Asia, who was also at the briefing.

Relative to the amount of wealth in the region, Asia still does not have enough private bankers, said Ms Wong, who is based in Hong Kong.

Last year, private banking contributed US$1.5 billion (S$2 billion) in pre-tax profit to the HSBC group, up 24 per cent from 2006.

Total assets under management, including trustee assets, which are held by the bank on behalf of its clients' beneficiaries, rose 21 per cent to US$494 billion, according to the bank's latest annual report.

Mr Meares said that competition for bankers tends to go in cycles - in the past few years, the market for wealth managers in Asia has been extremely hot.

"We started doing more of growing our own because the price just gets too high and the costs go up."

Also, clients are becoming more discerning, he said.

"They won't always change banks every time their banker moves."

But although hiring experienced wealth managers is not a sure way of taking business, it does save the bank the time needed to train them, he said.

"It's quite a sophisticated, complex business now - the range of products and services that you're expected to know is big."

Despite the keen competition, the bank sees a good long-term future in countries in Asia and Latin America, he said.

The number of rich people is growing most rapidly in Asia's economic powerhouses of China and India, as well as other fast-emerging economies in Latin America and the Middle East, said the latest WorldWealth Report published by Merrill Lynch and Capgemini last week. - THE BUSINESS TIMES