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HSBC India to cut 300 jobs, close half of its branches

News Agencies | Updated on: 20 May 2016, 13:40 IST

The Hongkong and Shanghai Banking Corporation (HSBC) on 20 May announced a consolidation exercise under which it will almost halve its branches in the country to 26 as customers shift to digital alternatives for their banking transactions.

The exercise will also affect over 300 jobs - less than 1% of the bank's total workforce of over 33,000 people in the country, and "redeployment opportunities will be accorded to the affected employees", the bank said.

"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," HSBC said in a statement.

The total number of branches will come down to 26 in 14 cities from 50 in 29 cities earlier, with the smaller centres taking the bulk of the impact.

It added that the impacted branches account for only 10% of the customer base in the country.

The reduction in branches is due to customers' adoption of digital solutions, it said.

"This change reflects changes in customer behaviour, who are increasingly using digital channels for their banking," the bank said. "India is a priority market for HSBC and we will continue to invest to achieve sustainable growth by supporting the needs of our customers," HSBC India's chief executive Stuart Milne said.

The consolidation exercise is the result of a strategic review of retail and wealth management vertical and will be carried out in the coming months in a phased manner, said HSBC, which has been present in India since 1853.

The priority is to ensure "changes are implemented in a manner which will minimise disruption to its customers and its staff", the statement said.

The bank said India was the fourth biggest contributor to the group with a pre-tax profit of USD 606 million in 2015 and the retail business is "core" to its India franchise.

Even as the physical locations are reduced, the bank will continue to invest in the retail operations, it said, adding that soon it will be coming out with an "expanded proposition" for top-tier clients.

A list of the impacted branches shared by the bank illustrated that it is withdrawing from smaller cities and towns but will continue to keep its presence in the metros and big cities.

It is closing branches in Guwahati, Indore, Jodhpur, Lucknow, Ludhiana, Thane, Mysore, Nagpur, Nashik, Patna, Raipur, Surat, Trivandrum, Vadodara and Visakapatnam, while bigger cities like Kolkata (5 branches), Chennai (1), Delhi (2) and Pune (1) will also be impacted.

The bank will continue to have its presence in Ahmedabad, Bengaluru (2 branches), Chennai, Coimbatore, Gurgaon, Hyderabad, Jaipur, Kochi, Kolkata, Mumbai (9), New Delhi (3), Noida and Pune, it said.

The announcement comes at a time when the Reserve Bank has asked foreign lenders to turn into wholly-owned subsidiaries (WOS) rather than operate as branches of foreign entities.

Singaporean lender DBS Bank, one of the first ones to apply for WOS conversion, has announced aggressive plans to expand its physical presence in the country.

Digital involves adoption of alternative channels of banking services delivery like mobile and internet.

The introduction of tools like Aadhaar card has only made it easier, wherein now even an account can be opened without a physical visit to any branch.

-PTI

First published: 20 May 2016, 13:40 IST
 
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