NEW DELHI: British financial giant HSBC announced yesterday that it was closing its struggling retail brokerage and depository business in India, the latest international bank to reduce operations in India.
The move comes five years after HSBC, one of the three largest foreign banks in India, entered the country’s fiercely competitive retail broking business. Nearly 300 employees of the company stand to lose their jobs due to the decision, the Press Trust of India said.
“We are discontinuing retail broking and retail depository services business here, operated under HSBC InvestDirect Securities,” HSBC India said.
“Impacted employees will be offered a fair and equitable severance pay in line with HSBC policy,” the statement added.
HSBC India entered the Indian retail brokerage business in May 2008 — just months ahead of the global financial crisis — by buying a 73 percent stake in ILFS Investsmart for $242m. Later it took its stake to over 93 percent, bringing its total investment to $296m. HSBC’s exit comes after a review of its businesses, the statement said.
The statement, however, said that HSBC remains committed to the Indian market, where it employs over 30,000 at the group level. HSBC will keep investing in other businesses such as retail banking and wealth management, commercial banking, investment banking and capital markets, institutional broking, asset management and insurance services, the statement said.
AFP
