Oct. 18 (Bloomberg) -- HSBC Holdings Plc, Europe’s biggest lender, is closing the unit that offers retail broking and depository services in India as the bank focuses on expanding faster-growing operations.
The U.K. lender won’t open any new broking accounts and will notify existing clients of the closing date for its HSBC InvestDirect Securities India Ltd. unit, HSBC said in an e-mailed statement yesterday. It will still offer retail banking and wealth management, commercial banking, investment banking and capital markets, institutional broking, asset management and insurance services in India.
“The closing down of the retail brokerage operations will help HSBC to free up capital which will be deployed in other growing businesses,” Gareth Hewett, a Hong Kong-based spokesman for the company, said by phone. “The group’s strategy is to invest in faster-growing businesses including wealth management and trade financing.”
The lender is retreating from some markets as Chief Executive Officer Stuart Gulliver seeks to increase profitability. HSBC completed the sale of its U.S. credit card unit to Capital One Financial Corp. in May 2012 and sold its stake in China’s Ping An Insurance Group Co. in February.
Shares of HSBC gained 0.5 percent to HK$84.50 in Hong Kong as of the noon trading break. The city’s benchmark Hang Seng Index rose 0.6 percent.
Hewett said 300 employees will be affected by the Indian closing, without specifying how many job cuts there will be. He declined to give a time frame for winding down the operations and to disclose Indian brokerage revenue.
HSBC has 50 outlets in India across 29 cities, according to Vinh Tran, a Hong Kong-based spokeswoman of HSBC. The London-based lender currently has about 30,000 employees in the South Asian country.
The U.K. bank paid $296 million in 2008 for control of brokerage IL&FS Investsmart Ltd., which it renamed HSBC InvestDirect India Ltd.
HSBC’s presence in India dates back to 1853. India and mainland China are among the lender’s priority markets where it expects future growth opportunities to be concentrated, according to the bank’s latest annual report. HSBC generated $809 million pretax profit from India last year, compared with $813 million a year earlier, the report shows.
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