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Business News/ Companies / News/  ‘HSBC’s clients don’t want to miss the India opportunity’
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‘HSBC’s clients don’t want to miss the India opportunity’

He said in an interview that a number of international customers are now actively talking about their India strategy, and eyeing opportunities in a market of 1.4 billion.

Barry O’Byrne, chief executive of HSBC’s global commercial banking (Mint)Premium
Barry O’Byrne, chief executive of HSBC’s global commercial banking (Mint)

HSBC Holdings Plc is witnessing rising interest from its global clients to come to India. Barry O’Byrne, chief executive of HSBC’s global commercial banking, said in an interview that a number of international customers are now actively talking about their India strategy, and eyeing opportunities in a market of 1.4 billion. Edited excerpts:

What is the role of the commercial banking division at the bank?

Most of our customers have an aspiration to go global. In terms of the bank, commercial banking segment accounts for about 32% of the profit before tax, globally. We have gone on a big journey of transformation. And that goes for India, too. Our ability to work with customers as they internationalize, is our big differentiator. Helping Indian businesses transact, and trade and operate around the world, is hugely important to us, as is helping inbound companies showing huge interest and demand for India. In India, we have traditionally had a big focus on corporates, and the mid-market segment, but we are really ramping up our attention on business banking and SMEs (small and medium enterprises) now as well.

There is a significant opportunity here for us as an international bank and a significant opportunity that is unique to India, given the investment the government has made, and the capability a bank like ours has. We have got a global strategy and we deploy it and tailor it in different markets. India is very much a strategic market for us given its size and scale, but more importantly its potential.

How do HSBC’s clients see India?

We are hearing from customers that there is an opportunity in India today and they do not want to miss it. What I am not hearing from customers are any fundamental concerns about doing business in India. The reality is there is a huge shift in the narrative around India. This is something I have noticed and the number of international customers that are now actively talking about their India strategy, the role of India, the potential of India and how all the ingredients are there for them to operate in India. I have had the opportunity to meet a lot of our customers in Mumbai, and I asked several of them if they are focused on India and getting bigger here or going more global. The reality is that they talk global and then bring it back to India. So yes, they aspire to operate globally, but at the same time, the Indian opportunity is one that is not lost on them.

Is India gaining as a favourable investment destination after supply chain disruptions and the ‘China plus one’ strategy of companies?

There were supply chain disruptions and a lot of companies became focused on resilience. And I think what India does is, it offers the potential for companies to have another manufacturing base, another trading partner. Companies increasingly are diversifying. When we talk to businesses, they see India as an opportunity for adding another scale market given its demographics.

I always say to the team that diversification is not at the expense of one geography. It is not India wins and somebody else loses but it is an ‘and’ strategy. These businesses, want to be in multiple markets and they want to win in India as well. Businesses are coming to India and that is the reality. If you look at our account opening volumes, there is an increase. I guess clients see that India has 1.4 billion people and if they can play in India and be relevant, it is a huge opportunity.

Has the Hindenburg report on Adani group dented India’s image among potential investors?

I will not comment on specific names. I think your question is broader than that and we have previously said clearly that we are not a direct investor. I think in any market around the world, there is always the potential for similar unexpected events. I have been talking with international customers about India over the last two weeks, and I met a lot as I have been travelling a lot. This kind of issue is not front-of-the-mind for anyone.

No one has fundamentally shifted their view on India. In any market, there will always be times when the focus is on certain names, and the key piece is always how the market evolves and learns from it. But clients take a medium to long-term view on markets and if India is going to form part of your supply chain, or if India is going to form a big part of your trading network and you are going to establish a presence here, you are not going to be put off by what will be seen as short-term events.

What is HSBC’s strategy when it comes to fintechs?

We have got a multi-faceted relationship with fintechs. In many instances, we partner them, and they bring capability to our business. Some of the dialogues are starting to happen in India, given the huge potential in the tech space. The partnerships will be with a view to leveraging some of these capabilities in India, and leveraging their capability globally. I have seen capabilities I can bring to my global business and roll it out elsewhere. In some cases, we also compete with fintechs because they operate in parts of the market where we operate as well. In other cases we learn from each other. We have over 1,000 fintech partnerships and we are actively looking to grow. Of course, we also bank them and provide them with capital.

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Shayan Ghosh
Shayan Ghosh is a national writer at Mint reporting on traditional banks and shadow banks. He has over a decade of experience in financial journalism. Based in Mint’s Mumbai bureau since 2018, he tracks interest rate movements and its impact on companies and the broader economy. His interests also include the distressed debt market, especially as India’s bankruptcy law attempts recoveries of billions worth of toxic assets.
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Updated: 16 Mar 2023, 06:36 AM IST
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