Global banking major HSBC on Tuesday reported a 33 per cent jump in profit-before-tax from its India operations to $451 million (about Rs 2,000 crore) in the first half of 2011-12 ended June 2011, making the country its sixth-most profit market globally.
"This strong 33 per cent rise in pre-tax profit at $451 million is complemented by very good asset quality and strong liquidity. We are optimistic about the India growth story. These numbers make India the sixth-most profitable market for us globally," HSBC India Chief Executive Officer Stuart A Davis told reporters here.
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The British lender's domestic unit also reported major improvements in its retail and wealth management verticals, with the losses coming down to $4 million from $49 million in the year-ago period.
Its global banking and markets vertical's revenue rose to $392 million during the first half from $245 million in the year-ago period, while the commercial banking division's revenue doubled to $78 million.
HSBC Asia-Pacific Chief Executive Peter Wong said the bank would lay greater focus on its unsecured lending business, comprising credit cards and personal loans, which was put on the back-burner during the slowdown years.
"In India, although the loan growth is kind of flat, actually what we are trying to do is that we will sort of emphasise on the unsecured portfolio and then increase the secured portfolio," he told reporters from Hong Kong in a video conference.
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Davis said HSBC's overall assets remained almost flat in comparison to the same period last year, at $6.1 billion, with commercial loans constituting $4 billion, loans against property at $732 million, residential mortgages at $949 million and unsecured loans (the credit card and personal loan businesses) at $446 million during the reporting period. .
Given global events like the US debt crisis, the sovereign debt crisis in the euro zone and problems in the Middle East, Wong said the bank will be a "little cautious" on loan growth in the second half of the year.
Davis said with a $451 million PBT, India is the 6th most profitable geography for the bank. India's GDP is poised to grow in the 8 per cent range till end-2012, but policy decisions being taken right now will ensure if the economy will sustain the rate going forward or not, he said.
Davis further pointed out that quick decision-making, acting on corruption and consistent policies were the key factors that would help maintain the growth trajectory.
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The bank will adopt a "controlled and calibrated" approach while growing its unsecured lending book and the sourcing of such assets will be primarily done internally through existing relationships, while it will be "selective" on external sourcing.
Because of the high rate scenario, the bank is witnessing clients going slow on capex plans, while there is a greater appetite for external commercial borrowings, which do not show in HSBC India's books, Davis said, adding there was no stress in assets as a result of the high rates.
The bank is hoping to get the go-ahead on its plans to acquire Royal Bank of Scotland's branches in India by the year-end. "We are in constant touch with the Reserve Bank of India (RBI) and once their nod is in, we are ready to complete the deal," Davis said.
However, he refused to divulge details about the reasons for the delay in receiving the RBI's nod.