The India CEO told Reuters on Thursday that Holdings PLC plans to relaunch its India private banking business within a year, after the Asia-focused lender identified the country as a key market for growth.
In 2015, the Indian private banking business was exited as part of a group strategy. The lucrative but very competitive Indian market has few foreign players in a segment catering to high net worth individuals.
The London-headquartered bank is preparing to relaunch the business in India at a time when it is increasing its focus on Asia, which is the biggest region in terms of profit generation with Greater China and India among its main markets.
In India, there is a large amount of wealth creation in India and the growth of the number of millionaires, so an in-principle decision has been made to introduce private banking in India, said Hitendra Dave, CEO, India.
He said that the process of internal approvals could take anywhere from six to 12 months and will include a full suite of private banking products.
HSBC currently caters to wealthy Indians from its global hubs in Singapore, London and the Middle East.
Nuno Matos, HSBC global CEO of wealth and personal banking, told Reuters in November last year that the bank was exploring re-enter onshore private banking in India.
HSBC earned less than half of its revenue and about two-thirds of its pretax profit in 2021 from Asia. It has moved global executives to Asia and invested billions of dollars into the lucrative wealth management business.
Dave said that the bank aims to increase the customer base in India in different business segments over the next three to five years, taking advantage of foreign rivals shrinking their business and growing wealth in the country.
In 2021 HSBC India's profit before tax increased by 9% to $1.11 billion, from $1.02 billion in 2020, led by a 42% growth in income from its commercial banking business, which includes medium and small enterprises.
The group has invested $4.5 billion into the country over the years. Dave said that we have managed to grow without additional capital in the last few years and that may continue in the foreseeable future.
The lender plans to increase its stake in the insurance joint venture after buying the mutual fund arm of India's L&T Holdings for $425 million last year.
HSBC has identified India as one of its top strategic markets and we have a huge potential for organic growth but we may also look at inorganic growth if an opportunity arises, said the India CEO.