Stuart Milne, chief executive officer, HSBC India, is a man of impeccable timing. Our meeting is scheduled for 7pm. Milne walks in on the dot and sits in the lobby of The Oberoi in Mumbai, clearing the backlog of unread emails on his cellphone.
Before Milne’s arrival, I had spent about 15 minutes with his communication team, which briefed me on Milne’s life and HSBC’s functioning in India. The bank, which has been present in the country for more than 160 years, is the oldest international lender active here. Milne is part of a long list of expat CEOs in India.
It is time for dinner and I am escorted to Vetro, the Italian restaurant at The Oberoi, where Milne and I are meeting.
“I am going to order a vegetarian pasta. I tend to not eat much when I have had a long day of travel,” he says.
Milne, 56, has just returned from a quick trip to London to get his visa sorted out. Going there personally and figuring out the paperwork is the quickest way to get your visa done, he says.
I settle for the tagliatelle with carbonara sauce, and Milne asks for a spaghetti dish.
Milne, a Scot by heritage, begins by talking about how he started at HSBC in the early 1980s. “It was only because I had a degree in Arabic,” he says.
As a college student, he dreamt of getting an honours degree in Arabic and Mandarin. He thought both languages would be significant, particularly in the world of business, and would help him get overseas postings. His peers and seniors laughed at his choice. He already knew some Arabic, however, since his father was in the oil business and he had grown up in West Asia—so he decided to major in it.
Except for a short period of schooling in Scotland, Milne says he had had almost no connections with the UK. And once he had got his degree in Arabic, he wanted a job overseas, anywhere away from London—HSBC was the first among the few choices he had.
“If I wanted to continue working in the UK, I would have joined Barclays,” he says.
In the early 1980s, Milne says, HSBC’s international programme was like an old boys’ club—that has changed dramatically now. He spent a few months learning the ropes in London and was then sent on assignment to Brunei. “There was no Google in those days, so I had to get my atlas out and figure out where exactly I was going,” he recalls.
Throughout his career at HSBC, Milne has worked at the bank’s international offices, across Asia, Europe and the US. His most memorable stint was as the head of HSBC’s Japan office, where he was in charge when the tsunami hit in 2011. Stories about Milne’s presence of mind during that crisis made headlines. He famously asked his employees to remain in their offices rather than run out and risk drowning.
Milne came to India a year later.
“The best thing about India is that everyone here has an opinion and isn’t afraid to share it. It stands out especially when you have just come from working in Japan, where people are expected to not stand out,” he says. “But at some point the debate has to end and the execution has to begin.”
HSBC’s India business is one of its most profitable franchises. In the year ending December 2015, HSBC India reported a net profit of $606 million (around Rs4,107 crore).
While the potential in India cannot be doubted, investors will have to accept that the growth numbers will probably not match what they had anticipated, he says. Change cannot always be drastic in a democracy. This reality needs to be accepted.
In India, HSBC has been focusing on improving its retail businesses for its largest customer base—high net-worth, city-dwelling customers who have much of their wealth invested with HSBC. The bank is already in the process of reducing its retail branch network to half in a bid to sharpen its service offering to its customer base. In Milne’s words, this is not a retreat from the retail business but a recognition of trends in the digitization of banking.
Under Milne’s leadership, the bank has already shut down its retail brokerage business, InvestDirect, which it had bought from IL&FS in 2009, because it just did not fit into the bank’s strategy. “Like anything else in the world, you have to figure out what your natural advantage is and play to that. Maybe once you have used your natural advantage well, other opportunities open up,” he adds.
One of the bank’s more important campaigns here is aimed at increasing the number of women in its senior management teams. HSBC India provides women right below the top three levels of management special opportunities to work with outside consultants and take part in training modules over a year. They can then apply for more senior positions.
At the end of the year-long programme, around 25% of the women were promoted to senior management levels. In the second group, which is in training right now, a number of women have opted for challenging roles overseas. In the programme’s 18 months, about 50% of the women who participated have benefited.
“What we found is that when a new role goes up and we list about six qualifying parameters that we are closely looking at, men would come up and apply even if they fulfilled only two of those parameters. Women, though, would wait till they were convinced that they qualify for all six. Maybe women are more diligent when they apply. But what we have been trying to tell them through these training programmes is to just go out and apply for something. At worst, you will get turned down and that is okay. Everyone gets turned down at some point in their work life. But if you get it, it means a whole new thing for your career,” he says.
Milne’s business mantra shows what a cautious banker he is. Get a deposit, give out about 65% of that as a loan and invest the rest in a government bond. Everything else, he says, is ancillary and will follow if you get the first three steps right.
The cautious investor gets his adrenalin rush from sailing. Sailing, he says, is 99% boredom and 1% sheer terror, but that small percentage of terror gets the adrenalin pumping. Last year, Milne took a long vacation with the family and sailed across islands, sometimes in choppy waters, fulfilling one of his biggest dreams.
“I have a sailboat which is currently in the Canary Islands. I took possession of this boat last year, and we sailed through the English Channel, passing across Portugal, right across Gibraltar to Valencia, sailing across 2,500 miles. Sailing is fun when you go with family. For the first part of the trip, I had one of my sons, a university friend of his and some other friends. The rest of my family, which includes my wife and the other two children, joined us in Gibraltar,” he says.
This year, the Milne family plans to spend three weeks sailing around the Canary Islands. “I have never been there,” Milne says. The ultimate plan is to sail to the Caribbean, but that might warrant a sabbatical from work, which is difficult to come by at the CEO level, he says.
We’ve been talking for an hour. Vetro is filling up around us, and the buzz of conversation is growing. It’s time to leave.