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HSBC's move to cut branch tally by half may lead to job rejig

Second largest foreign bank in india to focus on retail banking through digital channels, lower presence to 14 cities from 29 currently.

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HSBC, present in India since 1853 and now the second largest foreign bank in India, has decided to reduce its number of branches to 26 from 50 now, and turn its focus on retail banking through digital channels, the British lender said on Thursday.

The move follows a strategic review of its Retail Banking and Wealth Management (RBWM) business in India.

As a result, the lender will lower its presence from 29 cities to 14 cities. The bank said it would not contemplate any further downsizing.

PTI reported that the exercise would lead to over 300 jobs being affected, which is less than 1% of its total workforce of over 33,000 people in the country

"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," said an HSBC spokesperson.

The move to reduce its branches stemmed from increased adoption of digital solutions by customers, it said. "This change reflects changes in the behaviour of customers, who are increasingly using digital channels for their banking," the bank said.

The bank said in a statement that it does not expect any additional branch consolidation beyond that being announced on Thursday. "The consolidation of the branch network will take place over the coming months in a phased manner," it said.

HSBC said its priority is to ensure that the changes are implemented in a manner which will minimise disruption to its customers and its staff.

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

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 the bank.

"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 bank also said that India was the fourth biggest contributor to the group with a pre-tax profit of $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.

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