Banking News

HSBC eyes India expansion as rivals retreat

(6 March 2017 – India) HSBC is preparing to wrest market share in India as its multi­national rivals shrink into their home markets. The UK­based lender is banking on its global network and relatively good capital position to increase exposure to large companies in India.

“Our global network is a very powerful tool for us,” said Hitendra Dave, head of global banking and markets, which generates close to 50 percent of the bank's profit in India.

“It is very difficult to imagine today a bank trying to replicate the size we have in 70 countries in a globalised world. (At the same time) many of our competitors have announced that they are looking inwards. We want to take business away from competition, typically multinational banks.”

Dave is in charge of trading in debt markets, equity capital markets, debt capital markets and corporate banking, including financial institutions. Results released last month showed that this vertical generated US$355 million (A$470 million) in profit in 2016 out of the total $743 million from India, making the country the third largest contributor to the bank's global profit. Dave said HSBC is targeting increasing share of companies the bank serves already.

“We want to do more with our existing client base and take business away from competition, typically multinational banks simply because the customer knows us and we know the customer,“ he said.

The banks major multinational rivals including Barclays, Royal Bank of Scotland, Deutsche Bank, UBS and Bank of America­Merrill Lynch, have scaled back their operations in the country due to competitive and capital pressures.

HSBC closed its private banking business and in mid-2016, closed 24 of its 50 branches in India, seeking to push more retail and wealth management business to the online channel.

Dave said the closing down of branches had minimal impact on the global banking and markets business division, which deals with the largest companies and institutions.

“Our MCLR was priced such that for those customers we were comfortable making the capital and liquidity available, and we were always right up there in terms of the ability to do so. For most of 2016, we were almost the lowest on the street,“ he said.