India has replaced China as the third largest profitable region for Hong Kong and Shanghai Banking Corp Ltd (HSBC) led by strong growth in its global banking and markets division which services large corporations and includes treasury operations.
HSBC, Europe’s largest bank by assets, said its India profit before tax rose 19% to $1.51 billion in 2023 from $1.27 billion a year ago behind Hong Kong and the UK, the bank’s two largest business regions, results released on Wednesday showed.
China’s profit plummeted 89% year on year to $371 million in 2023 from $3.40 billion in 2022 due to losses the bank suffered in its wealth management, personal banking and corporate centre verticals. Profit growth in India was also helped by a fall in expected credit loss provisions year on year which dropped to $51 million from $90 million in 2022.
The global banking & markets division (GBM) the largest revenue stream for the bank in India reported a strong 24% increase in profit to $774 million in 2023 from $622 million a year ago. Commercial banking division, which serves small and medium enterprises (SMEs) was the second largest profit division for bank reported a 31% increase in profit before tax to $398 million from $304 million a year ago.
The bank’s corporate centre division, which provides support services to the bank globally reported a 6% drop in profit before tax to $289 million in 2023 from $306 million a year ago.
Profit from personal banking and wealth management, the smallest business in terms of revenue in India also increased 24% to $56 million from $45 million in 2022.
The bank said India and Vietnam are among the fastest-growing economies in the world benefiting from competitive labour costs, supportive policies and changing supply chains. “The positions that we have as a leading foreign bank in mainland China, India, Singapore, the UAE, Saudi Arabia and Mexico – all of which are also well connected to our international network – mean we are well placed to capture opportunities in these fast-growing economies,” group executive, Noel Quinn said.
HSBC has the largest workforce in India of 42,000 out of the 2.21 lakh full-time employees of the bank at the end of 2023.
