HSBC exited the Indian private banking business in 2015 as part of a group strategy. There are few foreign players in the lucrative but very competitive Indian market segment catering to high-net-worth individuals.
The London-headquartered bank is preparing to restart business in India at a time when its focus is on AsiaWhich is the largest region in terms of its profit generation with Greater China and India as its main markets.
“We may see an increase in the amount of wealth creation and the number of millionaires in India… so an in-principle decision has been taken to restart private banking in India,” said Hitendra Dave, CEO, HSBC India Told.
“We are going through the process of internal approval and this could take up to six to 12 months and will cover a full suite of personal banking products,” he said in an interview.
Currently, HSBC focuses on catering to wealthy Indians from its global hubs in Singapore, London and the Middle East.
Nuno Matos, HSBC’s global CEO of wealth and personal banking, which includes the private banking business, told Reuters in November last year that the bank was exploring whether to re-enter onshore private banking in India.
HSBC generated half of its revenue from Asia and nearly two-thirds of its pretax profit in 2021. It has increased its focus on Asia by shifting global executives and raking in billions of dollars in a lucrative wealth management business.
Dave said the bank aims to quadruple its customer base across various business segments in India in the next three to five years, taking advantage of some of its foreign rivals decimating their business and growing assets in the country.
HSBC India’s profit before tax grew 9% to $1.11 billion in 2021 from $1.02 billion in 2020, led by a 42% increase in income from its commercial banking business, which includes medium and small enterprises.
Dave said, “Over the years the group has invested $4.5 billion in the country. Over the years we have been able to grow without the need for additional capital and this may continue in the near future as well.”
The lender last year agreed to buy the mutual fund arm of India’s L&T Finance Holdings for $425 million, and also plans to increase its stake in the insurance joint venture.
The India CEO said, “HSBC has identified India as one of its top strategic markets and we have a huge potential for organic growth, but we can also look at inorganic growth if the opportunity arises. ”