Hsbc India Plans Spread Via Buyouts

HSBC India, part of the $ 674 billion asset-based HSBC Group, is eyeing acquisitions in the country to expand its business and network. Currently, the bank has about 29 branches across the country.

Zarir J Cama, chief executive officer of HSBC India, said: "We haven't yet identified any target bank. We are waiting for changes in the restrictions on the holdings of foreign banks in domestic banks. The main restrictions are 49 per cent ceiling on equity; 10 per cent ceiling on the voting rights and limit on the appointment of only two directors of the foreign banks. We want more voting rights, which the Reserve Bank of India might allow soon."

Cama, who was in the city to inaugurate the second service centre of HSBC Electronic Data Processing Center, said: "Our acquisition plans also hindered by the confusion about the existing operations of the acquiree bank. The issue needs to be clarified by the central bank."

Recently, the bank has applied for setting up an Asset Management Company (AMC) and is awaiting the approval from the Securities and Exchange Board of India. The AMC expects to launch its first scheme by end of this year and will also take up wealth management for high-networth individuals.

"The primary dealership operations, which we recently took up are in full swing," Cama said. The bank is also planning to set up a broking subsidiary to pursue its insurance distribution plans. Currently, it has a tie-up with Tata-AIG to distribute the joint venture company's products.

"Our focus is mainly on consumer financing. Currently, the customer advances are about 22 per cent of our loan portfolio and we plan to increase it to 50 per cent," Cama said.