During the year 2008-09, Hongkong and Shanghai Banking Corporation plans to become aggressive on the commercial banking business front by launching newer innovative products, new additional investments, hiring more manpower, and venturing into newer areas of the country.
“Currently, we are penetrating the tier-II regions of the country, like Ahmedabad, Poona, Lucknow, Ludhiana, and Coimbatore. Here, we are engaging more people to do business,” said Puneet Chaddha, managing director and head of commercial banking, HSBC, India. As of June 2008, the commercial banking division of HSBC, India employs 2,000 individuals.
Chaddha said that the bank will ramp up its operations by adding an additional 25%, taking the headcount to 2,500 by the end of this year.
There was a 41% increase in the headcount between January-December 2007 over the previous year.
However, he added that the biggest hurdle the bank’s commercial banking business faces is the shortage of talented staff in tier-II cities
“We are not able to find talented staff in smaller regions, which makes business management difficult. Moreover, employees from tier-I cities are not in a position to migrate to smaller regions to take care of business,” Chaddha said.
HSBC’s clients in the commercial banking space mainly include professionals, traders, and a huge chunk of exporters, who have a turnover of less than a million dollars.
Chaddha said that the profit before tax in 2007 for the commercial banking division in India nearly doubled over 2006, showing a growth by 91%, over the previous year.
“We plan to grow in the same manner this year. In the Asia-Pacific region, India is the fastest growing for the commercial banking space,” said Chaddha.
Interestingly, HSBC’s interest for opening an NBFC for expanding its retail business has taken a back seat. Naina Lal Kidwai, country head of HSBC India said that though the bank had applied to the Reserve Bank of India (RBI) for an NBFC licence, the central bank has not given its approval as yet.
“Now that there is a slowdown in retail operations, we are not too keen on pursuing a NBFC licence,” she said.
