In a bid to boost digital banking to develop its consumer business in the South Asian nation, HSBC Holdings Plc last week announced plans to close almost half of its branches in India. The downsizing of India operations will help HSBC focus more on digital banking channels to expand its urban customer base.
The London-based bank will shut 24 of its 50 branches to achieve “the right mix of digital versus physical branch distribution,” according to an e-mailed statement on Thursday. The branches to be shuttered account for less than 10% of HSBC’s retail customer base in India.
Moreover, the bank’s action will impact 300 of its employees, 1% of its 33,000 employees in the country. HSBC plans to consolidate from 50 branches across 29 cities to 26 branches across 14 cities in a phased manner.
According to the bank’s statement, the decision was taken after a strategic review of its retail banking and wealth management (RBWM) business revealed that its customers are “increasingly using digital channels for their transactions”.
“India is a priority market for HSBC and we will continue to invest to achieve sustainable growth by supporting the needs of our customers,” Stuart Milne, group general manager and chief executive officer of HSBC India, said in a statement.
The current move comes on the heels of the bank’s plan to exit its global private-banking operations in India. Also, the consolidation follows the bank’s announcement of relocating 840 information technology jobs from the U.K. to lower-cost countries like India, China and Poland by Apr 2017.
In a strategic overhaul aimed at boosting profitability and overall efficiency, HSBC plans to cut thousands of jobs across the globe through branch closures and consolidation of IT and back-office operations. Also, it intends to redeploy resources to align with future growth opportunities and adjust to changes in the global operating environment.
According to a Bloomberg report, the bank has eliminated over 87,000 positions, exited at least 80 businesses and reduced its footprint to about 71 countries and territories from 88 since 2011.