Hsbc In The Middle Of 3-Year Business Plan

The Hongkong and Shanghai Banking Corporation Ltd (HSBC) has initiated a series of activities as part of its three year strategic business plan, which includes setting up of a loan processing hub in Hyderabad, an asset management company, a non banking finance company (NBFC) and a software development centre.

Addressing a press conference yesterday, Z J Cama, chief executive officer, India, said, "We are in the middle of our business plan, which will end in 2003. We are focusing on consistency, innovation, good reliable service and all that the customers want."

HSBC Holdings Plc is setting up a wholly owned subsidiary called HSBC Data Processing, which will process retail loans of UK to start with, while HSBC in India will establish an asset management company (AMC). Approvals from the Reserve Bank of India (RBI) and Foreign Investment Promotion Board (FIPB) have come for the AMC.

 

The bank is looking at acquisition of an NBFC for setting up such a company itself. This will take care of the bank's Rs 700-crore consumer finance portfolio. This includes Rs 300-crore car loan, another Rs 300-crore home loan and Rs 100-crore personal loan.

But Cama made it clear that HSBC is not interested in acquiring banks in India, where the current cap for foreign stake is 20 per cent.

"It does not make much sense to acquire a bank in India as HSBC will not have a majority control. The risk reward ratio is quite high," Cama added.

As for the insurance sector, the bank has decided to sell insurance products to its clientele. It will tie up with several companies for the purpose.

This apart, HSBC will start Internet banking in India in November. India will be one of the eight countries, where the bank will provide this facility.

The bank has lined up ambitious plans for its credit card business. "Our credit card business will grow exponentially," he said. The bank, which has close to 3 lakh credit card holders currently, expects to issue over one million credit cards by 2003.

The bank will co-brand its credit card with a private sector bank and is also co-branding with other companies to expand its client base.

The bank will purchase Rs 50-crore home loan portfolios from an Indian company, Weizman and will purchase portfolios worth Rs 150 crore from two other companies.

HSBC has extended its private banking services to Calcutta. Private clients is an on-shore service that includes individually-tailored investment advice, transaction execution, custodian and administration services, in addition to the existing personal banking services provided by HSBC in India. From January 1999, till date the bank has Rs 600 crore assets under administration.

Reacting to the Standard Chartered and Grindlays deal, Cama said that HSBC is not particularly concerned about the development.

"The acquisition by Stanchart does not create a bigger market suddenly. Competition is good for us. We welcome competition," he added.