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HSBC plans to invest $400 million in India
By siliconindia staff writer
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Wednesday, 06 October 2004, 19:30 IST |
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MUMBAI: Hongkong and Shanghai Banking Corporation (HSBC) is looking at investing over $400 million in India with organic growth driving expansion.
The foreign bank plans to open five-10 new branches and launch consumer finance business next year as part of business plans.
India and China are strategically important markets over medium and long term and both are critical for future growth of the bank, HSBC chief executive officer (Asia Pacific) Micheal Smith told reporters on Wednesday.
HSBC's cumulative investments in China is about $3 billion and it would be comfortable for cumulative capital exposure of $1 billion or more in India, Smith said.
There is no specific time frame for investments in India, he added.
HSBCs India chief executive Niall Booker said the bank has invested about $600 million in the country which includes financial investment in UTI Bank.
Smith said: "the bank wants to grow fast through organic route" and legal environment for acquisitions would not impact business plans."
Though, HSBC would look at acquisitions, subject to regulations, it would prefer organic route for growth despite longer payback period than pay a premium for acquisition.
Asked about the investment in UTI Bank, he said it was a financial investment and would be happy to broaden business relationship.
"We have plans to open five-10 branches in 2005 and will prepare plans and seek Reserve Bank of India's permission for the same," Booker said.
On launching consumer finance business (CFB), he said the bank has skill sets within organisation for CFB which is a business line in itself.
CFB is also a marketing tool to get customers at the beginning of value chain, he added.
HSBC could start CFB through non-banking finance company or some other arrangement, he said adding the bank would look at regulatory trade-off before finalising structure for it.
Commenting on setting up a research unit for investment banking segment, Booker said it is yet to crystalise into business plan and one official is stationed in Bangalore to do the groundwork.
Smith said the bank is looking at opening service centres to meet banking group needs and also look for business outside group.
The quality of staff and language are critical issues before us while preparing plans for this centre, Smith added.