HSBC India's profit before tax increased by 33 per cent year-on-year to $451 million, during the half-year ended June 2011.
The growth came mainly from commercial banking, and global banking and markets segments, even as the foreign bank cut down the losses in its retail banking and wealth management segment.
India's share in the group's profits is approximately 4 per cent.
The retail banking and wealth management segment saw a loss of $4 million during the six-month period, lower than the loss of $50 million in the first half of last year.
The commercial banking segment reported a profit before tax (PBT) of $78 million ($39 million) and the global banking and markets segment saw a growth of $292 million ($245 million).
The total loan book was flat at $6.11 billion ($6.21 billion). The break-up of the loan book is as follows: corporate (commercial, international trade and other), $3.98 billion ($4.16 billion); residential mortgage, $949 million ($855 million); property-related loans, $732 million ($564 million); and other personal loans, $446 million ($645 million).
“The loan growth was flat because there was high demand for External Commercial Borrowings from our corporate clients and these are booked offshore in our overseas book,” said Mr Stuart Davis, Chief Executive Officer, HSBC India, while announcing the bank's results.
The bank will continue to grow its unsecured book in a calibrated and controlled manner, he added.
In the first half of 2011, HSBC's Asia businesses reported a PBT of $6.8 billion, up 16 per cent from the corresponding year-ago period. HSBC Asia accounted for 59 per cent of the group's total PBT.
Net fee income grew by 17 per cent to $2.7 billion, as there was strong demand for wealth management and trade finance products. The loan growth in H1 was 13 per cent.
“We are shifting to more secured portfolios and corporate loans,” said Mr Peter Wong, CEO, HSBC, Asia-Pacific.
The bank would be more cautious in the second half due to issues such as the debt crisis in the Euro zone and the US and the political turmoil in the Gulf region, said Mr Peter Wong, CEO, HSBC, Asia-Pacific.
Layoffs
With regard to job cuts and layoffs, Mr Wong said that there will be reallocation of resources as the bank is trying to streamline its operations and IT systems.
In India, the attrition is already high as there is a war for talent.
The headcount in India could grow if the Indian economy grows. But there is no guarantee that every single entity in the group will grow, Mr Wong said.
Merger with RBS
About the impending merger of Royal Bank of Scotland's Indian retail and commercial business with HSBC, Mr Davis said the bank is still awaiting approval from the Reserve Bank of India.
“The key issue is around the fact that RBS is selling part of their business. They will retain the wholesale banking business and they want to retain some branches. So, the RBI has to consider it carefully since it has no precedent,” Mr Davis said.
HSBC currently has 50 branches and is awaiting the final decision on the merger with RBS before opening more branches, he added. RBS has currently 31 branches in India and wants to retain some of them.