MUMBAI (TIP): The Indian subsidiary of UK banking major HSBC on Thursday said it will reduce the number of branches in the country by almost half, a move that could result in job deployments for employees.
HSBC India, one of the oldest foreign banks to set up shop in the country —it established here in 1853 — said it was cutting its retail branch network in the country from 50 branches in 29 cities, to 26 branches across 14 cities, due to “changes in customer behaviour, who are increasingly using digital channels for their banking needs.”
The exercise follows a strategic review of HSBC India’s retail banking and wealth management business (RBWM). The bank shut down its private banking business in the country last year.
“Customer expectations are changing rapidly and we need to adapt accordingly,” said Stuart P Milne, group general manager and CEO, HSBC India. “India is a priority market for HSBC and we will continue to invest to achieve sustainable growth.”
While Milne did not comment on the job losses, a HSBC India spokesperson said: “A key priority is the fair treatment of our staff and we will do everything we can to assist affected employees during this business transition. Re-deployment opportunities would be accorded to the affected employees.”
The cutting of the branch network will take place in a phased manner and HSBC said it does not expect any additional branch consolidation beyond that announced on Thursday.
Reaffirming India’s importance, HSBC said the country is a priority market and was the fourth largest contributor to HSBC Group, with profit before tax of $606 million for calendar year 2015.
The bank shut down its private banking business in the country last year. “HSBC’s RBWM business is core to the bank’s franchise in India and the bank will continue to invest in this business. For example, the Bank will soon be announcing an expanded proposition to cater to its top tier clients and further technology deployments for the benefit of its retail customers,” the statement added.