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HSBC Re-Enters India Private Banking Markets After 8 Years
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HSBC Holdings plc (HSBC - Free Report) has re-launched its Global Private Banking (“GPB”) business in India. The lender was exploring options of re-entering the India markets for a year, as the country has been experiencing a surge in the number of super-rich.
HSBC exited India’s private banking business in 2015 as part of a group strategy. However, in November 2021, Nuno Matos, the CEO of HSBC’s Wealth and Personal Banking division, said that the bank was exploring re-entering onshore private banking in India.
Now, with the re-launch of its private banking operations in India, HSBC targets to serve the high-net-worth, and ultra-high-net-worth professionals, entrepreneurs and their families. The business will be aimed at clients with investable assets of more than $2 million.
Surendra Rosha, the co-chief executive of HSBC Asia Pacific, stated, “India’s acceleration as one of the world’s largest and fastest-growing economies is supported by its demographics, digitization and enabling policy infrastructure. Today’s launch of our new global private banking business will complement HSBC’s leading retail and corporate banking offerings. Ultimately, we are strengthening our presence in India and diversifying our capabilities in Asia.”
Annabel Spring, the chief executive of HSBC Global Private Banking and Wealth, said, “Entrepreneurialism and innovation are fueling both economic growth and significant wealth creation in India. Given this, being onshore in India is essential for HSBC's ambition to be the leading global private bank for Asian, International and HSBC connected clients.”
HSBC’s Asia Expansion Plans
HSBC’s re-entry into India’s private banking business is part of the company’s broader strategy to expand in Asia. HSBC, which already holds a dominant position in the Asia markets, aims to become a leader in wealth management in the region by leveraging its global private banking expertise and extensive international network in commercial banking.
The bank has already been undertaking several measures to increase its presence in Asia. In sync with this, it is weighing exit from at least 12 countries.
Over the last two years, HSBC has announced its plan to exit fully or some parts of its businesses in France, Greece, Russia and Canada, while having already exited from the U.S. retail banking space.
In November 2022, the company signed an agreement to divest its Canada banking business to the Royal Bank of Canada (RY - Free Report) . Per the agreement, RY will acquire all the issued common equity of HSBC Canada. The deal will increase RY’s market share in the Canada banking landscape, which is already dominated by a few large firms.
Moreover, last year, HSBC acquired 100% of the issued share capital of AXA Insurance in Singapore and L&T Investment Management Limited. In April 2022, HSBC raised its ownership stake in its China securities joint venture – HSBC Qianhai Securities Limited – to 90% from 51%.
Notably, HSBC’s Asia pivot story is already in progress. As part of its business transformation plan (announced in February 2020), the company has realized gross savings of $5.6 billion as of 2022-end, with cost to achieve a spend of $6.5 billion. The company expects to achieve an additional $1 billion of gross cost savings this year because of the actions undertaken in 2022.
Over the past six months, shares of HSBC have gained 16.5% compared with the industry’s growth of 6.2%.
Apart from HSBC, Citigroup (C - Free Report) is a major global bank undertaking restructuring operations by exiting less profitable markets. As part of its major strategic action announced in April 2021, the company will exit the consumer banking business in 13 markets across Asia and EMEA, including Australia, Bahrain, China, India, Indonesia and Korea.
C has made substantial progress on this front and identified the U.K., Russia and Mexico as other countries from where it intends to exit. These efforts are expected to free up capital, which Citigroup will likely invest in wealth management operations in Singapore, Hong Kong, the UAE and London to stoke growth.
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HSBC Re-Enters India Private Banking Markets After 8 Years
HSBC Holdings plc (HSBC - Free Report) has re-launched its Global Private Banking (“GPB”) business in India. The lender was exploring options of re-entering the India markets for a year, as the country has been experiencing a surge in the number of super-rich.
HSBC exited India’s private banking business in 2015 as part of a group strategy. However, in November 2021, Nuno Matos, the CEO of HSBC’s Wealth and Personal Banking division, said that the bank was exploring re-entering onshore private banking in India.
Now, with the re-launch of its private banking operations in India, HSBC targets to serve the high-net-worth, and ultra-high-net-worth professionals, entrepreneurs and their families. The business will be aimed at clients with investable assets of more than $2 million.
Surendra Rosha, the co-chief executive of HSBC Asia Pacific, stated, “India’s acceleration as one of the world’s largest and fastest-growing economies is supported by its demographics, digitization and enabling policy infrastructure. Today’s launch of our new global private banking business will complement HSBC’s leading retail and corporate banking offerings. Ultimately, we are strengthening our presence in India and diversifying our capabilities in Asia.”
Annabel Spring, the chief executive of HSBC Global Private Banking and Wealth, said, “Entrepreneurialism and innovation are fueling both economic growth and significant wealth creation in India. Given this, being onshore in India is essential for HSBC's ambition to be the leading global private bank for Asian, International and HSBC connected clients.”
HSBC’s Asia Expansion Plans
HSBC’s re-entry into India’s private banking business is part of the company’s broader strategy to expand in Asia. HSBC, which already holds a dominant position in the Asia markets, aims to become a leader in wealth management in the region by leveraging its global private banking expertise and extensive international network in commercial banking.
The bank has already been undertaking several measures to increase its presence in Asia. In sync with this, it is weighing exit from at least 12 countries.
Over the last two years, HSBC has announced its plan to exit fully or some parts of its businesses in France, Greece, Russia and Canada, while having already exited from the U.S. retail banking space.
In November 2022, the company signed an agreement to divest its Canada banking business to the Royal Bank of Canada (RY - Free Report) . Per the agreement, RY will acquire all the issued common equity of HSBC Canada. The deal will increase RY’s market share in the Canada banking landscape, which is already dominated by a few large firms.
Moreover, last year, HSBC acquired 100% of the issued share capital of AXA Insurance in Singapore and L&T Investment Management Limited. In April 2022, HSBC raised its ownership stake in its China securities joint venture – HSBC Qianhai Securities Limited – to 90% from 51%.
Notably, HSBC’s Asia pivot story is already in progress. As part of its business transformation plan (announced in February 2020), the company has realized gross savings of $5.6 billion as of 2022-end, with cost to achieve a spend of $6.5 billion. The company expects to achieve an additional $1 billion of gross cost savings this year because of the actions undertaken in 2022.
Over the past six months, shares of HSBC have gained 16.5% compared with the industry’s growth of 6.2%.
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Currently, HSBC carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Apart from HSBC, Citigroup (C - Free Report) is a major global bank undertaking restructuring operations by exiting less profitable markets. As part of its major strategic action announced in April 2021, the company will exit the consumer banking business in 13 markets across Asia and EMEA, including Australia, Bahrain, China, India, Indonesia and Korea.
C has made substantial progress on this front and identified the U.K., Russia and Mexico as other countries from where it intends to exit. These efforts are expected to free up capital, which Citigroup will likely invest in wealth management operations in Singapore, Hong Kong, the UAE and London to stoke growth.