HSBC Holdings Plc will close down its private banking business in India and transfer about 70 staff following a strategic review of the operations, people familiar with the matter said.
The London-based lender will move employees from the Indian private banking arm to the Premier banking business under HSBC’s retail bank, the people said, asking not to be identified as the information is private. HSBC confirmed in an e-mailed statement it decided to shut the global private banking operations in India and will offer clients the choice to move to its Premier business where appropriate.
Chief Executive Officer Stuart Gulliver, 56, unveiled a three-year plan in June to pare back HSBC’s sprawling global network, shut money-losing businesses and eliminate as many as 25,000 jobs after compliance costs surged. Other European lenders including Credit Suisse Group AG and Deutsche Bank AG are also cutting thousands of jobs as they adapt to tougher regulatory demands on capital.
The changes are expected to be completed in the first quarter of 2016, according to the statement, which didn’t detail the number of affected employees. HSBC’s headcount in the country, including its back-office operations, will remain at around 32,000, the people said.
HSBC’s private banking business targeted customers with a relationship balance of at least $1 million, while its Premier banking operations focus on customers with 2.5 million rupees ($37,500), according to the people. HSBC will invest in the Premier business in India to enhance its product range, the statement shows.
“India is a priority market for the HSBC Group,” it said in the statement. “We aim to achieve sustainable growth by supporting the needs of our customers in Retail Banking and Wealth Management, Global Banking and Markets, and Commercial Banking, businesses where we have a leading and highly differentiated position.”
The Indian private banking arm posted a $7 million pretax profit for the first half of the year, while the retail banking and wealth management unit posted a $3 million loss. CNBC TV-18 reported the changes earlier Friday, citing unidentified people.