hsbc: HSBC confident it can serve an aspirational India going global

With Citi India exiting India’s retail segment, another foreign lender, HSBC, is firming up plans to grab a bigger share of the pie.

While the London-based lender is still deliberating plans on branch expansion, it is building a tech stack to onboard a large section of the first-time salaried class, affluent Indians and the MSME segment as its clients.

“As countries become from lower middle income to middle income and higher, you will find the size of the market for an international bank becomes really large,” Hitendra Dave, chief executive of HSBC India, said in an interview with ET. “We are experiencing this in our wealth segment, mortgages, credit cards, remittances and transaction banking.”

Dave said the bank hopes to quadruple its total India customer base in the coming years.

“The target market for us has substantially increased just in 3-4 years and digitisation helps us access those people at a much more efficient cost,” Dave said. “In retail, our intention is to be doubling, tripling or quadrupling the number of customers we have across all layers.”

HSBC also plans to bring in the private bank in the third quarter of this year to India. The lender had exited the Indian private banking business in 2015 as part of a group strategy.

The bank is also betting big on the MSME segment which has been a growth driver for it. For the banking system, total loans to the MSME sector have grown nearly 31% during January-November 2022, largely supported by the government’s Emergency Credit Linked Guarantee Scheme.”Indian businesses are increasingly becoming more aspirational, micro wants to become small and the latter wants to enter the medium segment, while the mid-market company wants to become a conglomerate,” Dave said.

“We as a bank are suited to serve these kinds of customers, that is customers who want to buy and sell abroad, who don’t just want to source their equity from India but also want to source equity abroad, let’s say from private equity funds or other FDI kind of investors who want to trade increasingly with the rest of the world,” he said.

As much as 8% of India’s trade goes through HSBC’s channels, while almost a double-digit percentage of foreign direct investment is processed by it. Also, nine out of the top 10 Indian banks use HSBC for their foreign currency accounts internationally.

The foreign lender is also looking to increase its share in high-end mortgage loans and large-ticket borrowings. “I am the most competitively priced mortgage lender in the street right now and I’m particularly so for large-ticket borrowers because that suits my cost base,” Dave said.