BSTR/148

IBS Center for Management Research

HSBC’s Restructuring in India

This case was written by K. Yamini Aparna, under the direction of Vivek Gupta, IBS Center for Management Research.
It was compiled from published sources, and is intended to be used as a basis for class discussion rather than to illustrate
either effective or ineffective handling of a management situation.

2005, IBS Center for Management Research. All rights reserved.

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 BSTR/148

HSBC’s Restructuring in India

“We had to deal with structural issues and we were already behind the competition….. We want to
change the structure of the organization so that there are more people operating on the selling and
marketing side. As such, we are restructuring the skill set to drive sales and at the same time,
restructuring the basic terms and conditions (of employment) to lower cost structure.”1
- Niall S K Booker, CEO, HSBC India.

THE RESTRUCTURING

The Hong Kong and Shanghai Banking Corporation Limited (HSBC) entered India as early as
1959. Despite being one of the oldest and well-established foreign banks, HSBC had been lagging
behind local private sector banks and other foreign banks in India in terms of business network and
growth. HSBC‟s competitors and industry experts regarded it as a conservative bank that lacked
competitive spirit. Commenting on HSBC, the head of direct sales of one of its rival banks said,
“HSBC isn‟t seen as being as aggressive as its rivals in the market. It has extremely good
relationships with its branch customers and serves them very well, but it is just not seen as being
aggressive in the rest of the market.”2
HSBC‟s complacency was reflected in the bank‟s financial performance. Local private sector
banks like ICICI and HDFC were far ahead of HSBC in all business segments. When
benchmarked against foreign banks, HSBC fared badly. HSBC‟s net profits fell by over 25 per
cent for two consecutive years in the fiscal 2000-01 and 2001-02, while rival banks like Citibank3
posted a rise of 37 per cent in profits for the same period.
On November 2002, Niall S K Booker (Booker) was appointed Group Manager and Chief Executive
Officer (CEO) of the HSBC Group in India. Booker soon realized that HSBC India followed a
conventional approach to doing business and retained its old bureaucratic structure and culture. He
believed that the much criticized laidback work culture was the reason for the lacklustre financial
performance of the bank. Booker decided to transform the bank‟s work culture so that HSBC could
shed its bureaucratic and conservative image and gear up to face new challenges. He wanted HSBC
India to be proactive and aggressive like its competitors. To achieve this, Booker concentrated on
giving the bank a new direction by launching a major restructuring program.

BACKGROUND NOTE

HSBC is a leading global player in the banking and financial services industry. It is the third
largest bank in the world in terms of market capitalization (Refer Exhibit I for top 10 banks in the
world). It provided a comprehensive range of financial services, namely, personal financial
services, commercial banking, corporate investment banking, private banking and other related
businesses.

1
“HSBC Reworks Staff Structure,” www.rediff.com, August 19, 2003.
2
Celestine, Avinash and Byotra Anuja, “Booker‟s Prize,” Businessworld, December 22, 2003.
3
Citibank India operates 25 branches across 18 cities in India. Employing 5,000 employees nationwide its
operations include corporate, consumer and investment banking. Citibank provides diverse financial services
like credit cards, mortgages, personal loans, insurance, and investment services for on-shore customers.

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 HSBC’s Restructuring in India

HSBC was established in 1865 to finance the growing trade between Europe, India and China.
Scotland-born Thomas Sutherland (Sutherland), who worked for the Peninsular and Oriental
Steam Navigation Company, established the bank. He found that there was considerable demand
for local banking facilities in Hong Kong and on the Chinese coast. Sutherland established a bank
in Hong Kong in March 1865, and another in Shanghai after a month. The banks‟ headquarters
were at Hong Kong.
Soon, the bank opened branches around the world. The emphasis continued to be on strengthening
the presence in China and the rest of the Asia-Pacific region. By the end of the century, HSBC
emerged as the foremost financial institution in Asia. World War I (1914-1919), however, brought
disruption and dislocation for many businesses. The 1920s saw a revival with HSBC opening more
branches. During World War II (1941-1945), the bank was forced to close many branches and its
head office was temporarily shifted to London. After the war, the headquarters was shifted back to
Hong Kong. The post-war political and economic changes in the world compelled the bank to
analyze and reorient its strategy for continued business growth.
The acquisition of the Mercantile Bank4 and the British Bank of the Middle East (BBME)5 in
1959 laid the foundation for the present day HSBC Group. Other major acquisition included
controlling equity stake in Hang Seng Bank Limited in 1965. In 1972, HSBC‟s merchant banking
arm – Wardley Limited was established.
In the late 1970s, HSBC expanded its operations in markets where it had a negligible presence,
particularly in North America and Europe. In the US, HSBC purchased a 51 per cent equity stake
in Marine Midland Bank in 1980. This acquisition nearly doubled HSBC‟s assets from HK$128 bn
to HK$243 bn. HSBC‟s acquisition of Midland created one of the largest financial organizations in
the world during that period.
HSBC then focused on integrating and consolidating the business of the enlarged group. The
formation of HSBC Holdings Plc. in 1991 created a holding company for the HSBC group to bring
its various subsidiaries under one umbrella. Treasury operations in London, New York and Tokyo
were integrated and common technology standards were introduced. Similarly, between 1992 and
1994, HSBC brought together its activities in merchant banking, securities and asset management,
and then enhanced its private banking and securities custody business.
The adoption of a single group identity was considered essential for consolidating and developing
HSBC‟s role in the banking community. Therefore, in November 1998, the bank announced the
adoption of a unified brand. With the acronym HSBC and the red hexagon symbol wherever it
operated, to enhance recognition of the Group and its values among customers, shareholders and
staff. Since 2002, the HSBC identity carried the caption of „The World‟s Local Bank,‟ to
emphasize the Group‟s experience and understanding of a large variety of markets and cultures
(Refer Exhibit II for HSBC's major subsidiaries).
By 2000, HSBC had created a banking network spanning six continents, comprising over 9,500
offices in 79 countries, which served nearly 100 mn customers everyday. By 2004, the total assets
of the bank were worth US$ 1,000 bn.

4
Mercantile Bank was established as a state bank in 1932 by William P Murray. In 1945, it was converted
to a national bank and was renamed as Mercantile National Bank of Indiana in 1969. Mercantile Bank has
260 shareholders, including all of its directors, who live in Northwest Indiana.
5
Established in 1889, BBME began its operations as Imperial Bank of Persia, with a Royal charter from
Queen Victoria and support from the Government of Persia. The head office was in London, but all the
branches were located in the various towns and cities of Persia, with the Chief Office based in Teheran. In
1935, the name was changed to the Imperial Bank of Iran. In 1949, it became the Bank of Iran and the
Middle East. The present name was adopted in 1952.

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 HSBC’s Restructuring in India

HSBC IN INDIA

HSBC‟s origins in India could be traced back to October 1853, when the Mercantile Bank of India,
London and China was established in Mumbai. Starting with an authorized capital of Rs 5 mn, the
Mercantile Bank soon opened offices in London, Chennai (India), Colombo, Kandy, Kolkata
(India), Singapore, Hong Kong, Canton and Shanghai. In the next 10 decades, the Mercantile Bank
steadily expanded its geographical network and service offerings, keeping pace with the evolving
banking and financial needs of customers.
The Mercantile Bank was acquired by the HSBC Group in 1959. The head office of Mercantile Bank
at the Flora Fountain building in Mumbai continued to be the head office of the HSBC Group in
India. In the 1970s, HSBC decided to expand by acquisition and formation of its own subsidiaries.
HSBC introduced India‟s first automated teller machine (ATM) in 1987. In 2001, HSBC opened the
first bank branch in Pune (Western India) that remained open all 365 days a year.
In India, HSBC offered a comprehensive range of products and services to its corporate and
commercial banking clients and to a fast-growing personal banking customer base (Refer Exhibit
III for HSBC group companies in India).

THE RESTRUCTURING

On his appointment, Booker‟s approach was to focus on fine-tuning and executing existing
strategies, rather than experimenting with new plans. He intended to take it slow and steady
without radical changes. He said that “the people issue” was very important to him. Therefore, the
key components of the restructuring programme included introducing new work principles,
downsizing, organizational reshuffling and focus on new growth areas.

NEW WORK PRINCIPLES

HSBC‟s work culture was considered most bureaucratic among all foreign banks in India.
Reportedly, the top management had a laid-back attitude towards work. An insider said, “There is
a bunch of people at the top who aren‟t very competent and who all play golf together. It is
basically an old boys‟ club.”6
Booker observed that employees were promoted in spite of poor performance. Performance
bonuses in all departments were disproportionate to performance. Further, the proportion of
employees receiving bonuses was very large while the bank‟s performance was deteriorating. In
the fiscal 2002-03, over 90 per cent of employees received bonuses. Compared to employees in
other private sector and foreign banks, the proportion of fixed pay for an HSBC employee in the
total compensation package was high while the variable pay component was relatively low.
Booker declared that he wanted to revamp the work culture. The rules of compensation were
changed drastically. Bonus, increments and promotions were given strictly based on performance.
The top management, which was criticized for complacency, was told to concentrate on
introducing new products and services.
Booker aimed at making HSBC more market-driven and customer-oriented. A Customer Relations
Team was formed to follow up leads pertaining to products like wealth management, home loans,
credit cards and commercial banking. However, getting customers was not just the responsibility
of this team, but of every executive in the organization. The message was implemented in letter
and spirit. Explaining the transformation at HSBC, Rajnish Bahl (Bahl), Head of Personal
Banking, Western India, said, “We are aligning all our products and services to what the customer
wants. The focus is now on client relationships rather than products.”7

6
Celestine, Avinash and Byotra Anuja, “Booker‟s Prize,” Businessworld, December 22, 2003.
7
Swati Prasad, “Coming in from the Cold,” Business Today, June 06, 2004.

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 HSBC’s Restructuring in India

As per the changed compensation rules, for the financial year 2003-04, only 70 per cent of
employees received bonus. Booker warned that no more than 45 per cent of employees could
expect bonus in the next financial year. From April 01, 2004, HSBC India switched over to the
cost-to-company (CTC)8 compensation structure, which meant that all perks and privileges were
replaced by a cash compensation system. Vehicle and club entitlement was withdrawn from
managers at all levels. Subsidized loans, a long standing privilege for bank employees, was no
longer available. Employees with outstanding loans on low interest rates were asked to convert
them to commercial loans.
For existing employees who opted for the CTC compensation system, pensions were frozen at
current levels while new employees were not entitled to pension. Even smaller benefits like
extending the company‟s holiday homes to staff were done away with. Booker also announced that
the bank would not sign house leases on behalf of any of its employees, though this caused
problems to officers who did not have their own accommodation in big cities.
Managers were given a choice not to switch over to the new compensation structure. Some
employees who resented the new pay system commented, “The conversion option had a catch. It
had disincentives built into the system, which meant lower bonus, unattractive performance
incentives or even a cap on promotions.”9 However, Booker was unmoved by the resentment
among the employees.
The ban on perks was not extended to expatriate managers10 who belonged to HSBC‟s
international management cadre and who had served in India for over three years. They continued
to enjoy all perks and privileges, which were no longer available to local colleagues.

DOWNSIZING

HSBC initiated a downsizing exercise to improve operational efficiency. Non-performers were

asked to leave by offering compensation packages. All departmental heads were asked to reduce
staff levels and were told that they were expected to achieve performance targets even with fewer
people. High performers were promoted to take charge of key departments. Over 500 employees
were asked to leave by early 2003.
Another reason for downsizing was HSBC‟s efforts to focus more on retail banking, which
required cost cutting. The bank announced that it would lower costs by reducing excess workforce
by way of a voluntary retirement scheme (VRS). It invited representatives from private sector
insurance companies and direct marketing agencies to counsel employees who would need jobs
after leaving HSBC.
VRS was open to those who had either completed 10 years of service or attained the age of 40. The
bank wanted to bring down the average age profile of staff to less than 40. Employees were offered
10-year pay based on gross salary as against most banks‟ VRS packages, which were generally
based on basic plus dearness allowance. HSBC‟s VRS package was among the best in the industry
as employees got about Rs one to Rs 3.5 million each, net of tax. Industry experts said the VRS
package was 1.8 times better than that of other banks in India.
In the first round of VRS introduced by HSBC in June 2003, the bank received applications from
514 employees, including banking assistants and non-clerical staff aged 38 to 45, as against the
targeted 350. The VRS 2003 scheme closed on July 31, 2003. This brought down the bank‟s staff

8
According to the cost-to-company pay formula, all perks and non-cash privileges were replaced by a pure
cash compensation system. This way it was easier for the bank to calculate how much an employee cost to
the company in strict monetary terms.
9
“No More Perks for HSBC India Staff,” www.economictimes.indiatimes.com, April 22, 2004.
10
Expat Managers were the mangers who came from outside India – expatriate managers.

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 HSBC’s Restructuring in India

to 2,800 and reduced the age profile to around 40. Booker said the whole exercise was aimed at
making HSBC more agile to meet market demands and provide better customer service through
skilled and motivated personnel.
Booker also felt the need for recruiting fresh blood. He stated that the prime focus of the
downsizing was not just reducing staff, but hiring the right people. He said, “Having the right
people in the team is inarguably more important than having the right strategy, because the right
people will in time come up with the right strategy.”11 He felt that HSBC required a more “sales
and service-oriented culture” rather than an „audit type‟ of culture. He hired about 180 sales people
in 2003 and planned for 100 more in 2004.
Booker said HSBC would recruit people with sales and service skills. He said most of the new
recruits would be on contract basis and many routine operations would be outsourced so that the
new people would work in sales rather than operations. He also concentrated on recruiting the
„right people‟ for top management to give a new orientation to the organization.

ORGANIZATIONAL RESHUFFLING

Apart from downsizing, a major reshuffle at top management level was announced 12. Naina Lal
Kidwai (Kidwai), who was Vice-Chairman and Managing Director of HSBC Securities and
Capital Markets India Pvt Ltd, was named the deputy CEO of HSBC India. Simen Munter
(Munter) was made Chief Operating Officer (COO) of the bank. With Kidwai and Munter, HSBC
had both a deputy CEO and a COO for the first time in India. Kidwai would focus on the overall
business of HSBC India, while operations would be handled by Munter.
According to HSBC officials, this move was a part of the alignment process of corporate banking,
as it would help the bank synergise investment and corporate banking activities. Booker said,
“These top level appointments only reinforce HSBC‟s commitment to its operations in India.
HSBC has nurtured some of the best talents in the banking industry and I am delighted to have
been able to draw upon this strength to constitute a formidable top team for HSBC in India.”13
The functional divisions were also reorganized. In March 2004, the corporate banking section was
split into two divisions – Corporate and Investment Banking and Markets (CIBM); and
Commercial Banking, which was business from small and medium term enterprises (SME &
MMES). The products and services provided by CIBM included banking, financing, advisory
services, investor services and insurance services. The division concentrated on providing
customized financial solutions to major clients including the government, corporate and
institutional bodies. Managed as a global business, HSBC followed a long-term relationship
management approach to develop complete understanding of the client‟s financial requirements.
Clients were served by sector-based client service teams that combined relationship managers and
product specialists, to develop financial solutions for individual client needs.

11
Kothari, Pooja and Joshi, Anurag, „Citi Slicker,‟ Business of Management, www.learning.indiatimes.com,
September 12, 2002.
12
Other key positions shuffled included, Subir Mehra, who was named the head of the bank‟s commercial
banking business; Puneet Chadha, who would head the bank‟s cards business; Nancy Dickinson
(Dickinson), senior manager (operations) for HSBC Electronic Data Processing India (HEDPI), who
would take over from Richard Groves as regional head Northern India. Robinder Singh, head of
marketing, was replaced with Sangita Pendurkar (Pendurkar), who was working with Hindustan Lever,
where she had handled the „Fair and Lovely‟ product. Her non-banking back ground was believed to give
a different perspective to the operations. Joel Farnworth took over as head of human resources and was
made in charge of revamping that function.
13
“HSBC Names Kidwai Dy. CEO, Munter India COO,” The Economic Times, May 21, 2004.

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 HSBC’s Restructuring in India

Commercial banking was to be the new thrust area for HSBC. The SME and MME businesses
were more widespread and offered higher returns. So, HSBC planned to leverage the CIBM
relationship to develop the commercial banking business and fulfil the financial needs of small and
medium companies.

FOCUS ON HIGH GROWTH AREAS

The restructuring programme also included more focus on high growth areas like home loans,
asset management and insurance businesses and discontinuing unprofitable areas like automobile
loans. To increase market share in the home loan segment, HSBC opted for strategic tie-ups. It
tied up with South City, the residential and commercial project launched in Kolkata14. According
to the agreement, all South City customers were offered special home loan schemes with interest
rates as low as seven per cent and zero processing fees. HDFC 15 and ICICI16 were the major
players in the home loan segment and HSBC aimed to be on par with them shortly.
HSBC gave a major thrust to retail sector operations in India. Huge amounts were invested to
strengthen and expand the retail banking business. Nick G Winsor (Winsor), Head of Personal
Finance Services said, “We had invested relatively less than our competitors in the consumer
business. We are now seeking to reverse this.”17 Though the exact amount was not disclosed,
media reports said HSBC‟s investment in personal banking rose by five times in 2004. It was also
planned to double investment in 2005. HSBC planned to increase the sales force by 400 by
January 2005.
The size of the insurance market in India was estimated at approximately Rs. 4600 bn and was
expected to grow at a rate of six per cent every year. In 2003, HSBC received a license from the
Insurance Regulatory and Development Authority (IRDA) to operate as a composite insurance
broking company. HSBC Insurance Brokers (India) Pvt. Ltd., started with the minimum requisite
capital of Rs 25 mn, with a shareholding pattern of 26 per cent to be held by HSBC and the rest 74
percent, by customers and associates.
HSBC India‟s insurance arm was expected to benefit from the worldwide network available
through the new entity, which was an international risk management, insurance broking and
employee benefits organization. It processed premiums in excess of $2 bn a year.
While expanding business in high growth areas, HSBC also planned to exit businesses making
insufficient profits. For instance, the margins in auto loans were negligible. Moreover, competitors
like ICICI had acquired a strong foothold and dominated this segment. Therefore, instead of
exhausting resources fighting competition in an unprofitable area, HSBC decided to exit this
business.

THE BENEFITS

The impact of the restructuring programme was reflected by the improved financial performance
of HSBC (Refer Exhibit IV and V for the financial highlights of HSBC). For the financial year
2003-04, the assets per employee and net profit increased by 30 per cent; operating profit by 31 per
cent and cost-to-income ratio came down from 47 to 43 per cent compared to the fiscal 2002-03.

14
Kolkata is the capital of West Bengal, an Eastern state in India.
15
Incorporated in 1977, HDFC provides long-term housing finance to individuals/corporates for their
housing needs. For the fiscal 2003-04, HDFC earned a gross income of Rs 307.785 bn and a profit after
tax of Rs 85.178 bn.
16
ICICI Bank is India‟s second largest bank with total assets of about Rs 1361.380 bn as on June 30, 2004.
For the fiscal year ended 2003-04, the bank earned a profit after tax of Rs 16370 mn.
17
“HSBC to Expand Operations, to Hire 400,” www.economictimes.indiatimes.com, October 19, 2004.

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 HSBC’s Restructuring in India

Personal financial services accounted for 36 per cent of total advances, against 31 per cent in the
previous fiscal. HSBC‟s retail assets doubled during this period from around a fourth to a third of
its total assets. HSBC expected that the retail business would grow by 40 per cent in the fiscal
2004-05.
Home loans business grew by 100 per cent; and the branches‟ contribution comprised 30 per cent.
By early 2004, HSBC started selling home loans more aggressively, helping the bank to increase
its overall loan disbursals by 13 per cent for the quarter ending June 2004. Home loans accounted
for over 60 per cent of that growth. Revenues from the wealth management business grew five
times. HSBC‟s net NPA declined to 0.70 per cent during 2003-04 compared to 1.03 percent in
2002-03. Total deposits during 2003-04 increased by 27 per cent, with demand deposits doubling
from the previous financial year and savings deposits rising by 39 per cent.
HSBC‟s higher operating income and its ability to contain costs helped it record an impressive 30
per cent rise in net profits for the fiscal 2003-04 despite an outgo of Rs 1.96 bn for VRS. Booker
said the improved performance was due to more emphasis on sales and marketing and strict vigil
on costs, which had gone up by just two per cent.
Improved financials apart, the restructuring helped HSBC develop an aggressive and performance
oriented work culture. Commenting on the success of the restructuring programme, Booker said,
“Employees are sitting at the edge of their seats. And I must say they have done remarkably well
in adapting themselves.”18

LOOKING AHEAD

Notwithstanding the benefits reaped from the restructuring, HSBC was still a small player in
several financial services businesses including asset management, home loans, stock broking,
credit cards and retail banking in India. For instance, HSBC Asset Management (India) Private
Ltd. launched in December 2002, had total assets under management amounting to Rs 540 bn by
June 2004. Still, it was only the 10th largest asset management company (AMC) in India.
The slow growth of advances was another problem for HSBC. In the financial year 2003-04,
HSBC‟s loan disbursals grew by just 4.67 per cent over the financial year 2003 while for the same
period, its competitors like Standard Chartered and Citibank loan disbursals grew by 44 per cent
and 11 per cent respectively.
Moreover, in spite of improved financial performance, the changes introduced by Booker did not
go well among top managers. There was a mass exodus of top-level managers19 who were unhappy
with HSBC‟s new work principles. Booker did not relent and the bank simultaneously recruited
around 15 top management employees in retail, corporate and private banking from other foreign
banks in India.
In spite of these problems, Booker was optimistic about HSBC‟s business prospects in India. He
aimed to achieve 10 per cent share in all industry segments in which HSBC operated. Future plans
included opening branches in more major cities to expand its wealth management operations;
greater penetration of the potential customer base and centralized processing of retail operations.

18
“Coming In From the Cold,” Swati Prasad, Business Today, June 06, 2004.
19
HSBC India had been in the news since 2002 for a manpower rationalization exercise. Many high cadre
mangers had quit. The most important among them being, Rohit Bhargava, deputy head of personal
financial services, HSBC Asia Pacific; Ashok H. Bhatia, VC & MD, HSBC Software Development
(India), who was credited with setting up the software center at Pune; Keri Patel, the head of operations of
HSBC‟s Software Development Center; JP Samant, head of taxation; K Phanindranath, manager (credit &
risk management); Dev Raman, head of equity sales in HSBC Securities.

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 HSBC’s Restructuring in India

Exhibit I
Top Ten Banks in the World (July 2004)
In Terms of Market Capitalization
Market Cap.
Position Bank Country
(In $ mn)
1 Citigroup USA 243,473
2 Bank of America USA 170,586
3 HSBC Holdings UK 163,667
4 Wells Fargo & Co. USA 98,570
5 Royal Bank of Scotland UK 95,759
6 United Bank of Switzerland Switzerland 86,663
7 JP Morgan Chase & Co. USA 77,716
8 Wachovia USA 61,694
9 Barclays UK 57,471
10 MTFG Japan 57,225
Source: www.thebanker.com.

In Terms of Assets
Position Bank Country Assets (In $ mn)
1 Mizuho Financial Group Japan 1,285,471
2 Citigroup USA 1,264,032
3 United Bank of Switzerland Switzerland 1,120,543
4 Crédit Agricole Group France 1,105,378
5 HSBC Holdings UK 1,034,2161
6 Deutsche Bank Germany 1,014,845
7 BNP Paribas France 986,982
8 MTFG Japan 974,950
9 SMFG Japan 950,448
10 Royal Bank of Scotland UK 806,207
Source: www.thebanker.com.

8
 HSBC’s Restructuring in India

In Terms of Profits (2003)

Position Bank Country Profits (In $bn)
1 Citigroup USA 20
2 Bank of America USA 15
3 HSBC Holdings UK 10
4 Royal Bank of Scotland UK 8
5 Wells Fargo USA 7
6 JP Morgan Chase USA 7
7 United Bank of Switzerland Switzerland 6
8 Wachovia Bank USA 5
9 Morgan Stanley USA 5
10 Merrill Lynch USA 4
Source: www.static.netlexikon.de.
Exhibit II
HSBC Group’s Subsidiaries
The HSBC Group is one of the largest banking and financial service groups in the world with
major commercial and investment banking businesses operating under long established names
in the Asia-pacific region, Europe, the Middle East and the Americas. The group possesses
assets in excess of USD$350 bn and has operations in 72 countries with a network of over 3,300
offices. Its major subsidiaries include:
The Hongkong and Shanghai Banking Corporation Ltd
Hongkong Bank of Canada
Hongkong Bank of Australia
Hongkong Bank of Malaysia Berhad
HSBC Asset Management
HSBC Insurance Holdings Ltd
HSBC Investment Bank LTD
HSBC Investment Bank Asia
HSBC Securities
HSBC Trade services
Forward Trust Group Limited
James Capel & Co. Limited
Midland Bank
Marine Midland Bank
Trinkhaus und Burkhard KGaA
British Bank of the Middle East
Equator Bank Limited
Source: www.gdc.com.

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 HSBC’s Restructuring in India

Exhibit III
HSBC Group Companies in India
The Hong Kong Shanghai Banking Corporation Ltd
HSBC Asset Management (India) Private Ltd
HSBC Electronic Data processing (India) Private Ltd
HSBC Insurance Brokers (India) Private Ltd
HSBC Operations and Processing Enterprises (India) Private Ltd
HSBC Primary Dealership (India) Private Ltd
HSBC Private Equity Management (Mauritius) Private Ltd
HSBC Insurance Brokers (India) Private Ltd
HSBC Securities and Capital Markets (India) Private Ltd
HSBC Software Development (India) Private Ltd.
Source: www.hsbc.co.in.

Exhibit IV
HSBC India – Financial Highlights (2003-04)

Net profit before extra-ordinary item up 109 per cent to Rs 3134 mn (Rs 1503 mn in the
previous financial year).
Net profit after extra-ordinary item up 32 per cent to Rs 1978 mn (Rs 1503 mn).
Net operating income up 29 per cent to Rs 13966 mn (Rs 10840 mn).
Deposits up 27 per cent to Rs 162699 mn (Rs 128012 mn) .
Advances up 17 per cent to Rs 96281 mn (Rs 82021 mn ).
Total assets up 21 per cent to Rs 253569 mn (Rs 209097 mn )
Home loans portfolio doubled to Rs 20000 mn
Personal financial services accounted for 36 per cent of total advances as against a 31 per
cent contribution in the previous period.
Source: www.hsbc.co.in.

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 HSBC’s Restructuring in India

Exhibit V
Financial Performance of HSBC India
(In Rs. mn)

Year ended March 31 2003-04 2002-03 Variance %

Net Profit
- Before extra ordinary item 3134 1503 109%
- After extra ordinary item 1978 1503 32%
Deposits 162699 128012 27%
Advances 96281 88012 17%
Total Assets 253569 209097 21%
Key Ratios
Return on assets 0.91 % 0.80%
Cost: Income ratio 45% 57%
Capital adequacy ratio 14.54% 18.10%
personal Financial Services Advances as Per 36% 31%
centage of Total Advances
Net non-performing assets 0.70% 1.03%
Source: www.hsbc.co.in.

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 HSBC’s Restructuring in India

Additional Readings and References:

1. Kothari, Pooja and Joshi, Anurag, Citi Slicker, Business of Management,

www.economictimes.indiatimes.com, July 09, 2003.
2. Patel, Freny, HSBC Makes Separation Sweet, Offers Rs 10-35 lakh, www.rediff.com,
July 11, 2003.
3. HSBC Realigns Staff Structure, www.domain-b.com., August 17, 2003.
4. HSBC Reworks Staff Structure, www.rediff.com, August 19, 2003.
5. HSBC into Insurance Broking – Golden Handshake Overshoots Target,
www.blonnet.com, August 19, 2003.
6. Celestine, Avinash and Byotra Anuja, Booker’s Prize, Businessworld, December 22, 2003.
7. Rao, Kala, HSBC Takes Local Stake, The Banker, January 05, 2004.
8. HSBC’s Smart Home, www.blonnet.com, March 14, 2004.
9. HSBC To Expand Capital Market Team, To Hire Up To 25 Grads,
www.economictimes.indiatimes.com, April 21, 2004
10. No More Perks For HSBC India Staff, www.economictimes.indiatimes.com, April 22, 2004
11. HSBC Names Kidwai Dy CEO, Munter India COO, www.economictimes.
indiatimes.com, May 21, 2004.
12. Prasad, Swathi, Coming in From the Cold, Business Today, June 06, 2004.
13. Revising Reforms, Business Standard, New Delhi, July 05, 2004.
14. HSBC (India) Net Up 32 pc On Higher Income, Cost Cuts, www.blonnet.com, June 15, 2004.
15. HSBC to Expand Operations, to Hire 400, www.economictimes.indiatimes.com,
October 19, 2004.
16. www.hsbc.co.in
17. www.rbi.org.in
18. www.financailexpress.com.
19. www.hindustantimes.com.
20. www.indiainfoline.com.
21. in.news.yahoo.com.
22. www.epnet.com.
23. www.valunotes.com.
24. www.reuters.com.
25. www.moneycontrol.com.
26. www.ipan.com.
27. www.wikipedia.org.
28. www.banknetindia.com.
29. finance.indiainfo.com.

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