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Is HSBC Global Asset Management (India) in trouble amid some of the global players exiting India?
India is a key strategic market for the HSBC Group and we continue to grow our business here. The asset management business plays a vital role in the Wealth Management business which is a focus area for HSBC Group. During this period I have also put in place the building blocks that I believe will hold us in good stead for the future and will help us become a dominant force in this space. We are under no trouble and we, in fact, have infused capital in last few years.
Despite being a part of a big global group, why cannot HSBC Global Asset Management, India be among the top players in India?
We do not necessarily see the size of assets as an indication of success. What is important is how you are seen by investors. Do they see you as a reliable and consistent provider and more importantly as someone who treats them fairly? That is more important to us. If this approach leads to a growth in assets, which I am sure it will, then it is welcome.
Does your parent company have the patience at a time when many foreign players are finding the going tough here?
I think I understand the nuance you are bringing about i.e. does HSBC have the patience to build a sustainable business or is it looking for quick success.The HSBC Group is financially strong and is committed to doing things the right way. And India is an attractive market – we are a country of young people and high growth rates. Given that our state-sponsored social security net is still developing, I think it is logical to expect that the wealth management industry will do well.
So, what's the strategy going forward in a tough market like India?
I don’t expect that the industry will significantly change in the way it operates – at least in the short term. But it will have to move to being much more investor-oriented in the long term. Our focus is therefore not on the short term but rather on how we can build a strong and sustainable business, which is investor oriented. Our strategy is to provide products which add value to our clients i.e., are suited to their needs, which are easily understood and which are fairly priced.
We aim to serve both the institutional segment and the retail segment as we have strong capabilities to reach out to them both and to serve them through our product range. On the retail side, we want to work with a distribution footprint that shares our vision and who is willing to be held accountable for their actions.
Do you favour institutional segment over retail?
I don’t think you can run a successful AMC business by focusing on only one segment. We are committed to the institutional segment as we are to our retail business. I don’t see them as being mutually exclusive rather they are complimentary.
How many locations are you present at currently in India?
We have a presence in 11 cities across the country. Almost all of them are the larger cities.
Is that not a big negative for you at a time when regulator wants MFs to penetrate smaller towns too?
We have to understand that the HSBC brand is more prominent in the larger cities – so that is the logical place for us to focus on and that is where we are able to serve our stakeholders efficiently. As our business grows, I have no doubt that our network shall also grow.
Will you be continuing to post losses in FY13?
We are largely a domestic business and like others in the industry, we too have witnessed a difficult period financially. But I am optimistic about the future.
Do you expect more regulatory changes going forward?
For now there is stability and the recent changes announced by the regulator are a big step forward and might I add very welcome. But to say that we have made all the changes that we require will probably not be accurate. Right now the industry is largely serving a traditional set of customers through traditional products. As investors become more exposed to mutual funds they would want a different category of products and the regulations would have to react to that.
