Global deal: Merrill & HSBC
Merrill Lynch and HSBC have set up a joint venture to create a global online banking and in-vestment services company.
Merrill Lynch and HSBC have set up a joint venture to create a global online banking and in-vestment services company.
The new company will start in the UK with Australia to follow around October this year
The two financail services heavyweights say the new company will be backed by up to US$1 billion in start-up capital and will be aimed at non-US clients with at least $100,000 to invest.
Under the terms of the deal, both group will take a 50 per cent stake in the venture which will be co-branded and based in London. The two will follow individual strategies within the US but hope the joint effort offshore will help in getting ahead of rival such as Citigroup.
The new venture will offer a range of products and services such as domestic and international equities dealing, fixed-income investments, money market accounts, managed funds and unit trusts. Other products on offer from the venture will include margin lending and access to a cur-rent account. Later, mortgages, bill payment facilities, credit cards and even options will be added.
While customers will have access to research, investments through the account will be self-directed and individual advice will not be offered.
The new operation intends to combine Merrill's investment research with HSBC's international presence and processing skills and hopes to capitalise on the growing demand for private bank-ing around the world.
The new venture will be aimed at a more affluent market than that already served by the fledg-ling hsbc.com business, focusing on clients with between $100,000 and $500,000 of liquid as-sets.
The service is expected to be rolled out in about 21 countries by 2004, about a year before it is expected to break even.
HSBC group chairman Sir John Bond says the driver behind the deal was "specifically designed to gain new customers for HSBC".
Both groups deny the move is a prelude to the full-blown merger that some analysts have pre-dicted.
AUTHOR
Jason Spits
Recommended for you
Net cash flow on AMP’s platforms saw a substantial jump in the last quarter to $740 million, while its new digital advice offering boosted flows to superannuation and investment.
Insignia Financial has provided an update on the status of its private equity bidders as an initial six-week due diligence period comes to an end.
A judge has detailed how individuals lent as much as $1.1 million each to former financial adviser Anthony Del Vecchio, only learning when they contacted his employer that nothing had ever been invested.
Having rejected the possibility of an IPO, Mason Stevens’ CEO details why the wealth platform went down the PE route and how it intends to accelerate its growth ambitions in financial advice.
