A Scottish banker, I wonder, as I climb the stairs of the Hong Kong and Shanghai Banking Corp. (HSBC) heritage office in Mumbai to meet its chief executive officer Sandy Flockhart. How much more reserved can one get?
On the fifth floor, there are Shrewsbury cookies, ginger nut biscuits and slivers of cheese sandwiches with tea and coffee. But post lunch with stock market regulator Securities and Exchange Board of India (Sebi) and an afternoon full of meetings, Sandy Flockhart is not eating. Instead, he is talking emerging markets with a group of journalists. And yes, he is measured and moderate and all you would imagine from a banker such as him in his dark suit and black and gold cufflinks.
Later that evening I find he can be more expansive, but for now Flockhart—flanked by HSBC India CEO Naina Lal Kidwai and chief financial officer Raj Tandon—emphasizes HSBC’s traditional strengths and the bank’s commitment to expand based on these strengths. It seems deliberate, coming as it does at a time when there has been criticism from some investors that HSBC hasn’t expanded in emerging Asian markets as aggressively as it could have.
Certainly for HSBC, whose write-offs in the US subprime crisis stand at $5 billion (about Rs19,700 crore), emerging markets are now crucial. And Sandy Flockhart who moved to Hong Kong in June as HSBC CEO has had much experience in all of these areas—from Thailand and Hong Kong to Saudi Arabia and Latin America and the Caribbean. For him, it has been a complete circumnavigation of the globe—from Hong Kong to West Asia to the Americas and now, back to Hong Kong.
The gatherer: Flockhart enjoys the fruits of his travel, from collecting art and picking up languages to golfing. (Jayachandran / Mint)
So which of these varied geographical assignments did he find most professionally fulfilling? “I would say Mexico, Latin America. We bought a large bank in Mexico, and I was responsible for making that part of the group,” says Flockhart of the $1.14 billion acquisition of Mexican bank Grupo Financiero Bital in 2002. The acquisition gave HSBC a huge presence in Mexico, adding six million customers through 1,400 branches and 17,000 employees to the existing HSBC Mexico network of 100 HSBC employees and 1,500 corporate, commercial and private banking client relationships.
Acquisitions such as these in emerging markets seem to be the way forward. Easier said than done perhaps, with valuations and regulatory issues limiting the extent of ownership, but HSBC would like to nevertheless “where the opportunity to acquire fits our requirement,” says Flockhart.
In Vietnam, HSBC recently acquired a 10% stake in Bao Viet Insurance and Finance Group, Vietnam’s biggest state-owned insurer, for $255 million. And as for their acquisition of the Korea Exchange Bank, Flockhart concludes that part of the conversation in wonderful bankerese: “As far as I’m concerned, we are where we are and that is where we’re at.”