Kolkata: Naina Lal Kidwai has been appointed chairperson of HSBC group companies in India beginning 15 April, London-based HSBC Holdings Plc. announced on Thursday.
Kidwai was group general manager and chief executive officer of its Indian banking business, The Hongkong and Shanghai Banking Corp. Ltd.
Stuart Davis, chief executive officer of HSBC Bank Australia Ltd, will replace Kidwai as the head of the bank in India.
Global scale: HSBC’s group chairperson Naina Lal Kidwai at a press conference in ITC Sonar, Kolkata on Thursday. Indranil Bhoumik / Mint
Davis and other chief executive officers of HSBC group companies in India will be reporting to Kidwai, Stephen Green, group chairman of HSBC Holdings, said.
HSBC, which has been operating in India for 155 years, is the first foreign bank to appoint a chairperson in India.
“India and China are for us the two most important countries for future growth… Because our business (in India) has become so broad based, we thought it was important to make sure we had appropriate leadership in place in India, a proper management structure that was able to take an overall view of development of all our businesses,” Green said while announcing Kidwai’s appointment.
“The scale of business in India is growing fast. We are into 10 different businesses including insurance and asset management. My job will involve broader oversight of multiple entities and representing India to the global shareholders and investors,” Kidwai said.
The bank’s assets in India are about $20 billion (Rs99,000 crore). It posted $666 million profit before tax for the year ending December, accounting for 7% of the group’s global profits. Employing 37,000 people across businesses, HSBC group in India accounts for 11% of its global work force.
Kidwai does not see any immediate possibility of locally incorporating the bank. “It’s too early to decide,” she said.
The Central bank has allowed foreign banks operating in India to remain as branches of global parents or become a subsidiary through local incorporation. The subsidiaries can also look for listing in Indian market. However, no foreign bank has yet taken this route.
Foreign banks in India together account for about 7% of banking assets. The central bank is slated to review its ownership policy of banks in the current fiscal that began on 1 April, but foreign banks are unlikely to be allowed a larger role in the wake of the global financial meltdown. Under current norms, foreign banks can take up to 5% stake in a local bank.
Asked why HSBC chose to move the head of its bank in Australia to India, Green said, “We believe in giving our people opportunities to take up leadership roles across geographies. Stuart has worked with the group in the US, Taiwan and Australia.”
Davis, who is expected to reach Mumbai next week, has been heading HSBC’s bank in Australia since 2002.
Kidwai’s key responsibility in her new role would be to prepare a strategy to integrate the group’s diverse businesses. “I think there’ll be a lot of HR (human resource) elements in my new role. Also, HSBC needs to have one face for its Indian businesses talking to all its stakeholders,” said Kidwai, who turned 52 on Thursday.
Besides banking, HSBC has business interests in insurance, insurance broking, asset management and private equity. It recently acquired local retail brokerage Investmart from Infrastructure Leasing and Financial Services Ltd.
Sandy Flockhart, chief executive officer of HSBC Asia-Pacific, said: “Our enlarged businesses have necessitated the creation of this new position for our Indian operations.”