UPDATE 1-HSBC unit shines as alternative to big Swiss banks

(Adds comments on financial targets, hedge funds, real estate)

By Laura MacInnis

GENEVA, March 10 (Reuters) - HSBC's (HSBA.L: Quote, Profile, Research) Swiss private banking arm posted record profits and took in large sums of money from wealthy clients in 2007 in spite of -- if not due to -- the turmoil that has hurt its larger peers.

HSBC Private Bank (Suisse), the Britain-based bank's main affiliate catering to the ultra-rich, said on Monday its assets under management rose 17.9 billion Swiss francs ($17.5 billion) last year to 186 billion francs.

That includes 22.7 billion francs in net new money from private banking clients, mainly newly-wealthy individuals in China but also clients from the Middle East and Russia.

And in spite of problems plaguing financial and credit markets in 2007, the HSBC unit's profits before tax rose 43 percent over the year to a record 800 million francs, Chief Executive Peter Braunwalder told a news briefing.

He said the Geneva-based bank, rated AA by Standard & Poor's and Aa3 by Moody's, avoided the worst of the subprime crisis that has squeezed larger rivals, including Switzerland's UBS (UBSN.VX: Quote, Profile, Research) and Credit Suisse (CSGN.VX: Quote, Profile, Research).

In the first two months of 2008, HSBC Private Bank (Suisse) has seen "very strong net new money figures as well as very strong results," Braunwalder said, while cautioning that broad market turbulence was likely to continue for some time.

"The year will be tough, so it's good to have a good start," he said. The bank aims to grow assets under management by 60 percent over the next three years, Braunwalder said, noting that "very aggressive" target was based on organic growth.