Hong Kong and Shanghai Banking Corporation (HSBC), which established the first ATM in India in 1987, is set to walk a different path to some of the other foreign banks operating in the country.
Post Covid, several marquee foreign banks with operations in India have put the brake on expansion, This is evident in the RBI’s branch statistics which show a decline in the number of foreign bank branches from 935 as of June 2021 to 836 as of September 2024.
Notable among them is Citibank whose number of branches has come down from 41 as of December 2022 to 16 as of September 2024, with the bank selling its India consumer business to Axis Bank.
While Standard Chartered has not seen a decline in the number of branches, it has sold its ₹3300 crore personal loan book portfolio to Kotak Mahindra Bank.
The Indian arm of London headquartered HSBC meanwhile is looking to open 20 new branches in new locations where it is not present over the next five years as it sees opportunities to grow business in the country. The bank has announced that it has received RBI approval for the expansion.
Amritsar, Bhopal, Bhubaneshwar, Dehradun, Faridabad, Indore, Jalandhar, Kanpur, Ludhiana, Lucknow, Mysore, Nagpur, Nashik, Navi Mumbai, Patna, Rajkot, Surat, Thiruvanathapuram, Vadodara and Vishakhapatnam are the cities where HSBC is looking to expand.
Hitendra Dave, CEO, HSBC India said that the rising number of high net-worth individuals, the growth of industrial clusters and startups, and the high base of non-resident Indians present an opportunity for HSBC to grow in India.
“In the last 5-7 years, the business community has become more externally oriented. The number of high-net-worth individuals is also rising across cities and they are located not just in the metro cities. So, the external environment has changed. HSBC has propositions we know that they are not going to get from anybody else. So, we have to naturally act,” Dave said.
“We will look to bring back the charm and experience of exclusive, premium and privileged banking across India. We will be opening roughly 4 branches per year. These 20 branches give us a presence in 20 new cities expanding our coverage in the country,” Dave said.
HSBC currently has 26 branches across 14 cities including a 8300 square foot branch in Bangalore. HSBC has also opened a 12,550-square-foot office premise in GIFT City offering services such as foreign currency banking accounts, Dollar fixed deposits and other dollar-denominated investment products among others.
“This expansion is a clear message from our end that we are not looking to shrink our presence in India,” Dave said, adding that India is a priority market for HSBC which already has a strong balance sheet.
HSBC India has posted a profit before tax of $1517 million in 2023, up 18.79 per cent from $1277 million in 2022. It has been consistently among the top 5 contributors to the group’s profitability.