India becomes third largest profitable region for HSBC in 2023, replaces China

India becomes third largest profitable region for HSBC in 2023, replaces China

Hong Kong and Shanghai Banking Corp Ltd (HSBC) on Wednesday posted a 25 per cent increase in profit from India operations to $1.5 billion for the financial year ended December 2023. With this, India became the third-largest profitable region for HSBC replacing China. The bank, which follows the calendar year as its fiscal, had earned a profit of $1.2 billion in 2022, HSBC said in its annual report for 2023.

In its annual report, HSBC said its India profit before tax rose 19 per cent to $1.51 billion in 2023 from $1.27 billion a year ago behind Hong Kong and the UK, which are its two largest business regions.

Countries, including India, Singapore, and Saudi Arabia, are the growing markets for the bank, it said.

Various factors played in favour of India. This included a reduction in anticipated credit loss provisions, dropping from $90 million in 2022 to $51 million in 2023. The global banking and markets segment became HSBC’s primary revenue source in India, showing a strong 24% profit increase to $774 million in 2023 from $622 million in the year earlier. Moreover, the commercial banking sector, catering to small and medium enterprises (SMEs), saw a significant 31% surge in pre-tax profit to $398 million.

HSBC, which has 42,000 employees in India operations, said the economies of south and southeast Asia will carry good economic momentum into 2024.

“India and Vietnam are currently among the fastest growing economies in the world, benefiting from competitive labour costs, supportive policies, and changing supply chains,” it said.

On the other hand, China saw a massive 89% decline in profit, plummeting from $3.40 billion in 2022 to $371 million in 2023. It was due to losses incurred in wealth management, personal banking, and corporate center verticals.

(With PTI inputs)

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