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HSBC

Background
The Hong Kong and Shanghai Banking Corporation’s
(HSBC) association with the banking industry in India
goes back about 150 years and is nearly as old as the
history of banking in the country. The association
commenced in 1853, when the Mercantile Bank of
India, China and London was established in Mumbai,
with its headquarters in London. The Mercantile Bank
was taken over by the HSBC Group in 1959. The
HSBC Group has so far invested US$ 590 million in
India and employed about 3,150 people as on March
31, 2004. In 2003-04, the bank had assets of about
US$ 5.51 billion.

HSBC in India has product offerings across the banking


spectrum, in product segments including retail liabilities
and assets, corporate banking, treasury operations and
investment banking.

India’s Leading Foreign Bank


The profits of HSBC India have shown a broadly
increasing trend. At 14.5 per cent (as on March 31,
2004), the capital adequacy ratio of HSBC was one of
the highest in the Indian Banking Industry.

The three largest foreign banks accounted for about


65 per cent of the total assets of all foreign banks in
India as of March 2003. With a market share of 18 per
cent (among foreign banks), HSBC is the third largest
foreign bank in India.

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Awards & Recognition ten leading Indian companies and eight of the ten
• Finance Asia has named HSBC the Best Foreign largest multinational corporations in India, providing
Commercial Bank in India for five years in a row, i.e. the full range of corporate banking services to these
2000, 2001, 2002, 2003 and 2004 customers. HSBC has leveraged upon its global
experience to innovate products and services to suit
• HSBC was voted ‘Global Bank of the Year - 2004’ local requirements. Maintaining long term relationships
by The Banker magazine for an unprecedented third and constant product innovation have been key factors
consecutive year contributing to the success of HSBC in India.
• HSBC was named the ‘World’s Best Bank - 2004’
in Euromoney magazine’s Annual Awards for A pioneer in computerisation
Excellence and product innovation
• An Outlook Money Survey has ranked HSBC India HSBC in India has retained the HSBC Group’s
No. 1 in Service Quality and Branch Facilities for pioneering spirit by being an active partner in the
2004 development of the Indian banking industry. The bank
launched the first ATM in India way back
• A Business Today - KPMG Survey named HSBC
in 1987. The bank was also one of the first banks in
India the Safest Bank in 2003
India to achieve an electronic banking customer interface
and this has helped it generate higher than market
Factors for Success growth rates for the Trade Services business.
HSBC has established strong businesses in all key areas Cashing in on the falling interest rate scenario in the
of commercial banking. In Corporate Banking, HSBC country, HSBC was one of the first banks to start the
has effective long-term relationships with seven of the innovative product offering - floating interest rate home

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loans. The home loans segment has grown at a CAGR largest issuer of credit cards in the country and a
of 32 per cent over the last 5 years. Currently, almost leading market acquirer.
75 per cent of incremental home loans are disbursed
As a customer relationship management exercise,
at floating rates.
HSBC has started Premier for individuals and
BusinessVantage for businesses. These are premium
Strong retail focus
with excellent CRM processes services designed to look after customers’ business
and personal needs including wealth management
Anticipating a retail banking boom in India the bank
solutions and personalised banking. The customer gets
acquired the Non-Fund activities from Gujarat Lease
the service of an exclusive Relationship Manager
Financing Ltd. in 1999. In the year 2000, the bank
dedicated to his/her needs. HSBC also offers its local
acquired the Chandigarh branch licence from Deutsche
expertise and global reach in handling customers’ trade
Bank. In 2002, HSBC acquired retail banking business
businesses, including a complete range of services that
from BNP Paribas and the Retail Banking Operations
facilitates him / her in export and import.
in Kolkata from Bank of Tokyo-Mitsubishi. Currently
HSBC has 37 branches across 18 cities.
Emerging as a complete financial services
A relatively late entrant into the booming retail segments solution provider
of asset management and home loans in India, HSBC
HSBC, in India, has positioned itself as a complete
has become more aggressive as indicated by the growth
financial services solution provider. It has expanded its
of its retail assets in the last fiscal year from around
customer base by extending its product range to include
a fourth to a third of its total assets.
a wide variety of investment products. It has established
In line with its retail focus, Credit Cards have been a reputation in India of being a provider of international
identified as a key growth area. HSBC is the fifth quality investment products and services.

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The company launched its Asset Management indicated its willingness to invest in other financial
Company (AMC) in December 2002 and has been sector businesses such as insurance and pensions
able to achieve one of the highest growths in assets should local regulations permit.
under management in India. The company had assets
HSBC plans to expand its capital market, corporate
under management of over US$ 1.2 billion as on
and investment banking teams in India. The bank intends
August 31, 2004. The number of accounts has risen
to set up a global analytical support team to help the
to over 150,000 in less than 2 years of launching the
group in its research in investment banking globally.
AMC.
To take full advantage of the boomimg equity markets
The HSBC group has got into insurance distribution and increasing volumes in the securities market owing
through both the corporate agency as well as through to the large number of initial public offers and mergers
the insurance broking channel. For life insurance, it has and acquisitions, HSBC is planning to ramp up its
tied up with Tata AIG. HSBC has also adopted a very presence in India.
effective cross-selling strategy to sell insurance to its
million plus customer base of account and credit card
holders.

Leveraging the India Advantage

Business Process Outsourcing


for international operations
In order to maintain its profitability levels, streamline its
costs, improve productivity and cut bureaucracy, HSBC
Group has started outsourcing its back office transaction
processing and software development activities to India.
It has launched captive BPO centres at Hyderabad,
Bangalore and Vishakapatnam and plans to gradually
shift more jobs to these centres. These centres currently
have more than 4,000 employees.

Software development
To leverage the software expertise available in India,
the bank has set up a software development centre in
Pune for developing solutions for HSBC Group’s offices
worldwide.

Future Plans
While HSBC has acquired assets and customers from
other departing foreign banks here, it was earlier
not keen on buying a minority stake in a local bank.
This strategy has changed with HSBC’s acquisition
of a 14.62 per cent stake in UTI Bank, an Indian private
bank with a substantial retail portfolio. HSBC has

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