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Riding On Growth

HSBC’s commercial banking business that lends to SMEs emerges as a key revenue centre after five years of sustained focus

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Rank 20- HSBC India

Hitendra Dave, MD

Sector: Banking

Overall Avg. Score: 2.64

Revenue: Rs 14,440 crore

Europe's second largest lender by assets, the Hong Kong and Shanghai Banking Corp (HSBC), recently said its profit before tax (PBT) in India increased nine per cent to USD 1.11 billion in 2021 from USD 1.02 billion in 2020.

This increase was led by a 42 per cent growth in income from its commercial banking business. This business includes loans to medium size and small companies. The PBT from its commercial banking division increased to USD 265 million from USD 187 million in 2020 likely due to growth in loans to small and medium enterprise’s (SMEs), and made up for stagnant profit from the bank's global banking and markets (GBM) which is the largest revenue centre for HSBC in India.

This contribution by the commercial banking division along with good performance on other parameters aided the bank to jump three places to the 20th position in the BW Businessworld Most Respected Companies rankings this year. It was ranked 23rd in the previous MRC survey.

GBM profit before tax remained unchanged at USD 593 million but still contributed more than half of the bank's profit in India, news reports said. HSBC's GBM division services large corporations and also includes treasury income for the bank.

India Key Market For HSBC

"HSBC India has consistently been amongst the top five contributors to the group’s profits. The wholesale business has performed extremely well across liabilities, assets, transaction banking and capital markets. India is a key growth market for HSBC globally and we’re keen to expand our international wholesale and wealth businesses," India CEO Hitendra Dave said in a news report. 

For HSBC, India is the fourth largest contributor to the bank's global profit behind Hong Kong, UK and China. The growth in the commercial banking business is on the back of a sustained focus by the bank in that segment in the last five years, the company said.

As per news reports, the corporate loan book of HSBC in India has seen a CAGR of 16 per cent in the last five years, largely due to more than three-fold increase in the loans disbursed to the small and medium enterprises in India. The total loan amount disbursed to the SMEs reportedly grew from USD 300 million in 2018 to over USD 1 billion till the middle of 2021. The bank has also increased its presence and now operates more than 26 branches in India.

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Magazine 4 June 2022 hsbc