HSBC?s plans to acquire RBS? Indian retail and commercial banking business might not have materialised, but the bank remains committed to its core strategy of growing organically through investments in the country. In an email to Pranav Nambiar, HSBC India group general manager & CEO Stuart Milne states that despite short-term challenges, the Indian growth story remains strong. With the Indian economy getting more globally connected, the bank expects to tap new opportunities. Though the bank currently earns a larger share of income from the global banking and markets division, efforts are on to earn an equal share from other business segments like retail banking and wealth management. Commercial banking is also expected to make larger contributions. Excerpts:

How is business looking for HSBC in India under difficult economic conditions, particularly after a good performance in 2011 when its pre-tax profit stood at $804 million?

I think economic circumstances are very volatile. If one has a business model designed to handle such volatility, the outcome can be more than satisfactory. Banks are after all a reflection of the underlying economy and we cannot avoid that. It is, however, individual strategies that will determine a bank?s success. We are very clear about our strategy. We aspire to be the world?s leading international bank and we endeavour to capture and deliver trade, capital and credit flows in the regions that we have chosen to be in.

India for us is a key growth market. So, short-term events do not deter us from making necessary investments. We watch our credit and market risk closely and this has helped us stay on course and perhaps helped us win the FE Best Bank Award too.

With the planned acquisition of RBS?s Indian retail and commercial banking business not fructifying, will it be a setback to HSBC?s expansion plans in India?

Our core strategy has always remained to grow organically and we are one of the largest foreign banks in the country. As the economy grows and gets more connected globally, there are ample opportunities for us to grow too. Since India is a key strategic market for HSBC, we have the full support of our parent in pursing growth here.

What are HSBC?s branch expansion plans in India?

The Indian growth story remains strong and we will look to participate in it as permitted by regulators. We will continue to build our client base, supporting growth in the economy as a whole.

What is HSBC India doing towards reducing its dependence on income from global banking and markets division?

We offer a whole range of banking & financial services to our customers ? retail banking and wealth management, commercial banking, global banking and markets, and global private banking ? all these businesses have strong fundamentals. We are focused on all our businesses and have very good teams to ensure healthy growth. For example, in the retail banking & wealth management space, we managed to rebound the business (profits for H1, 2012, at $35 million from a loss of $14 million in 2011) and this was achieved through a clear vision and focus on this business. Our global banking and markets division is certainly top class and continues to grow, but our other businesses are also growing and we believe that over the years, the pie will be more evenly distributed.

What is your take on RBI?s revised priority sector lending targets for foreign banks with 20 or more branches to 40% from 32%?

It will be a challenge. It promises to be a steep learning curve.

How do you view RBI?s proposed subsidiarisation norms for foreign banks?

We will abide by the regulators? requirements. The draft regulations were provided two years ago. At that stage, we had made a few recommendations. Some of these have been accepted and effected. We look forward to the publication of the final guidelines.

When does HSBC targets to achieve $1-billion annual profit in India?

Meeting the global aspirations of Indian companies and offering a customer-friendly retail banking experience to our target segment, being best-in-class with a growing business footprint, we believe we are well-positioned to a strong business presence in India. With a global network of over 80 countries that includes mature, developing and emerging markets, especially those where Indian companies are keen to increase presence, we have a tremendous advantage that we can offer local presence and knowledge for international connectivity and all these will help achieve our targets.