HSBC to close half of India branches in digital banking push

A yellow ambassador taxi driving past the HSBC bank building in Kolkata in this Nov 5, 2013, file photo.
A yellow ambassador taxi driving past the HSBC bank building in Kolkata in this Nov 5, 2013, file photo. PHOTO: REUTERS

MUMBAI (BLOOMBERG) - HSBC Holdings plans to shut almost half its branches in India and rely more on digital banking to expand its consumer business in the South Asian nation.

The London-based bank will cut 24 of its 50 branches as it seeks "the right mix of digital versus physical branch distribution," according to an e-mailed statement on Thursday (May 19). The outlets to be closed account for less than 10 per cent of HSBC's retail customer base in India, the bank said.

Chief executive officer Stuart Gulliver is paring back HSBC's sprawling global network and shutting money-losing businesses to improve earnings hurt by compliance costs. Since 2011, the bank has slashed more than 87,000 positions, exited at least 80 businesses and reduced its footprint to about 71 countries and territories from 88.

HSBC said it remains committed to India, where it is also shutting its global private banking operations. The country was the fourth-biggest contributor to group earnings before tax in 2015.

Among HSBC's foreign competitors in India, Singapore's DBS Group Holdings is also pursuing a digital strategy in the country, with the announcement of a mobile-banking initiative last month. DBS, Southeast Asia's largest lender, has sought central-bank approval to set up a wholly owned unit in India, where it has 12 branches.