HSBC closes private banking business in India

Multinational banking major HSBC on Friday announced its decision to exit private banking business in India while offering its existing clients the HSBC Premier, a global retail banking and wealth management proposition.

An HSBC spokesperson confirmed the story to CNBC-TV18 later stating that HSBC had indeed chose to close the private banking business “after a strategic review of the global private banking operations in India” as the group is looking to simplify its business and deliver sustainable growth.

HSBC will give its clients the option of shifting from private banking unit to retail unit.

Some 70 people working in the division, headed by Shantanu Ambedkar, will now be absorbed into the retail bank, officials said. This marks the third such exit of a foreign financial giant in the wealth management business after Royal bank of Scotland and Swiss-banking giant UBS.

The British bank is also investing in HSBC Premier in India to enhance product and services suite, which can be made available to select customers, he said. The process is likely to be completed in the first quarter of 2016.

The global bank’s private banking division has been mired in a black money probe after an investigation by ICIJ, a global journalists’ collective, found out that over 1,000 Indians had parked over United States dollars 4 billion in HSBC Geneva till 2007.

HSBC follows several other wealth managers, both foreign and domestic, who had ramped up wealth management operations during the high-growth period, hoping to take advantage of the robust economic growth, only to find themselves struggling when growth tapered and savings got squeezed.

Australia’s Macquarie had parted with its 50 per cent stake in the joint venture Religare Macquarie Wealth Management to its India partner back in September 2013.

Private sector banks continue to operate in the sector.

As of Nov 21, 2015, the consensus forecast amongst 28 polled investment analysts covering HSBC had it that the company will outperform the market.

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Saturday, November 28th, 2015 EN

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