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HSBC India profit dips, customer accounts sees over $500-mn plunge

Aug 11 2013, 16:37 IST
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'HSBC Bank USA has cooperated fully to the US Internal Revenue Service' (AP) 'HSBC Bank USA has cooperated fully to the US Internal Revenue Service' (AP)
Summary'HSBC Bank USA has cooperated fully to the US Internal Revenue Service'

UK-based global banking giant HSBC has seen its first-half profit from India business falling to USD 414 million in 2013, amid a decline of over USD 500 million in customer accounts since the beginning of this year.

According to the bank's interim financial report, its customer accounts balance in India fell to USD 9.85 billion as on June 30, from USD 10.41 billion at the beginning of 2013.

While the bank did not specify any reason for the decline in customer accounts, it said that the profits from India fell to USD 414 million in the first half of 2013, from USD 515 million in the same period last year.

The bank also said it is cooperating with US authorities with respect to a probe into suspected violations of tax laws involving US-based clients of an HSBC company in India.

"In April 2011, HSBC Bank US received a summons from the US Internal Revenue Service directing HSBC Bank USA to produce records with respect to US-based clients of an HSBC company in India.

"HSBC Bank USA has cooperated fully by providing responsive documents in its possession in the US to the US Internal Revenue Service," the global banking major said.

HSBC's global banking and markets business contributed more than half of the profits in India at USD 255 million, while retail banking and wealth management segment posted a small loss of USD one million in the first half of 2013.

In the first half of 2012, the bank had posted a profit of USD 35 million in retail banking and wealth management segment, while global banking and markets segment had also registered a higher profit of USD 306 million.

Its loans and advances to customers, however, rose to USD 6.8 billion in the first half of 2013, from USD 6.7 billion in the same period last year.

The bank said it continues to leverage its distinctive international network and business model, through offerings like providing "advisory services to multinational corporates, helping them enhance their stakes in locally-listed subsidiaries in India".

Overall, HSBC has reported a profit before tax of USD 14.1 billion, an increase of 10 per cent, for the first half of 2013. Its revenue, however, fell by 7 per cent to USD 34.4 billion. London-based HSBC is present across 80 countries including India and has been one of the biggest foreign banks present in the country.

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