HSBC is to shutter half of its branches in India as part of an ongoing global initiative to shift more business to digital channels.
London-based Hong Kong and Shanghai Bank Corporation (HSBC) has decided to shut half of its retail branches in India. This moves comes after the bank close down its private banking business in the country.
“The network will consolidate from 50 branches across 29 cities to 26 branches across 14 cities. This change reflects changes in customer behavior who are increasingly using digital channels for their transactions. The move follows strategic review of its Retail Banking and Wealth Management (RBWM) business in India.” said the bank in a release.
It is believed that about 300 employees are likely to be affected out of the total employee base in India that stands around 33,000.
“A key priority is the fair treatment of our staff and we will do everything we can to assist affected employees during this business transition. Redeployment opportunities will be accorded to the affected employees,” said a HSBC spokesperson. However, the bank was quick to add that it still remains committed to India as it remains a key market being the fourth largest contributor to HSBC Group, with profit before tax of $ 606 million ( Rs 4,121 crore) for calendar year 2015
“This move aims to position our RBWM business for the future, with the right mix of digital versus physical branch distribution. Customer expectations are changing rapidly and we need to adapt accordingly. India is a priority market for HSBC and we will continue to invest to achieve sustainable growth by supporting the needs of our customers,” said Stuart P Milne, Group General Manager and Chief Executive Officer, HSBC India. It also added that the bank does not expect any additional branch consolidation beyond this and will be soon announcing an expanded proposition to cater to its top tier clients and will look at further technology deployments for the benefit of its retail customers.
Most of the private and the public sector lenders apart from the foreign banks have been focusing on the digital medium to tap the urban consumer.
In fact, most of these lenders have shown a de-growth in branches as a channel with the digital medium picking up. However, HSBC is the first lender that has decided to reduce the branches as a result of shift in consumer behaviour to the digital medium.
Most other lenders in the country still remain bullish about branch expansion and believe that even though the size and the format of the branches will change, the branch addition is not expected to come down drastically in the coming quarters.
Earlier, this week another foreign lender, Royal Bank of Scotland (RBS) also announced that it has started the process of closure of its ten branches in the country. This move was in line with the company’s plans to shut down its banking operations in the country that was announced last year.
Another lender, Standard Chartered Bank had also said earlier that it will reduce its unsecured retail and corporate business in India.
HSBC to shutter half of Indian branch network