HSBC is best remembered for giving India the first automated teller machine (ATM) way back in 1987. Having long ago established its foothold in India, the bank, with its limited branch network of 47 across the country, has a strong consumer base. It has forayed into various business activities like personal banking, credit cards, NRI services, insurance, wealth management, bank accounts, and international services. Taking advantage of the fast pace economic growth, the focus is on small and medium enterprises (SMEs) and the limited branches in India is no stumbling block for the bank.
?We can overcome this limitation because of our strong technology and global footprint as most of these SMEs are exporters,? says Naina Lal Kidwai, the chief executive officer of Hong Kong and Shanghai Banking Corporation, India. ?We have the ability to link exporters to the other side of the country through trade financing and cash management. Today, we have 33,000 SME customers. We added 10,000 customers last year,? she adds. The sector contributes to about 60% of the manufacturing sector of the economy in terms of number of companies and employment and the bank is confident it can utilise its expertise to encash this opportunity.
Another significant area of thrust for the bank is consumer financing. The bank that once used to entertain only customers who could maintain a minimum Rs 10,000 in balances, is now doling out loans as low as Rs 10,000 to individuals. Perhaps low margins with high volumes is the new business mantra. ?This is a new portfolio for the bank, whereby we have been writing 18,000 new loans per month. 50% of the people who walk into this have never banked with any bank and are urban masses,? says Kidwai.
The origins of HSBC Bank in India can be traced back to October 1853 when the Mercantile Bank of India, London and China was founded in Mumbai. In 1959, the Hong Kong and Shanghai Banking Corporation (HSBC) acquired the Mercantile Bank of India and the head office of the bank was established in Mumbai. Through the 1990s, HSBC Bank blossomed into one of the leading banking and financial services organisations of the world. The bank has about 10,000 offices in 76 countries in Europe, Asia Pacific, the Americas, the Middle East, and Africa.
As part of its financial inclusion initiative, the bank has also started venturing into rural banking and other related activities. Only 20% of loans are provided through banks, 80% comes from moneylenders throughout India, says Kidwai. The bank currently has 2.7 million cards and 2.4 million customers where its credit cards are concerned.
Kidwai said that the thrust into the retail space would continue. Alongside, the bank will also continue to be a big player in the foreign exchange and derivative market. ?We are also active in the BPO space, software development centres, insurance venture, investment banking, consumer financing, and asset management business,? she added. The bank is also involved in funding Indian banks having an international presence.
The overall employee strength is about 33,000 people as of December 2007 compared to the 25,000 in 2006. ?We have added 8,000 people to the group over the last one year. These changes are on a weekly basis,? Kidwai said. While HSBC, India might face a crunch on acquiring branch licenses, Kidwai says they are growing faster than other Indian banks. ?We have managed to grow faster than Canara and SBI in terms of profits. We are using our limited 47 branches very effectively. We think a minimal of 200 and maximum of 500, in the next three to five years. Our profits are higher than banks with a higher network.?
The bank will venture into the mobile banking space and will also concentrate on growing its NRI segment.