In 2023, India surpassed China to become HSBC’s third-largest profit hub, showcasing a remarkable surge in profitability. The fiscal year ending December 2023 saw India’s profits soar by 25% to reach an impressive $1.5 billion. HSBC’s annual report for the fiscal year ending December 2023 unveiled key insights into India’s exceptional performance.
Factors Driving India’s Profit Surge
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Reduction in Credit Loss Provisions: Anticipated credit loss provisions decreased significantly from $90 million in 2022 to $51 million in 2023, contributing to improved profitability.
- Robust Performance in Global Banking and Markets: The segment witnessed a notable 24% increase in profit, reaching $774 million in 2023, up from $622 million the previous year.
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Remarkable Growth in Commercial Banking: Catering to SMEs, the commercial banking sector experienced a remarkable 31% surge in pre-tax profit, reaching $398 million.
India’s Economic Potential Recognized by HSBC
HSBC acknowledges India’s economic potential, positioning it alongside Vietnam as one of the fastest-growing economies globally. Factors such as competitive labour costs, supportive policies, and evolving supply chains contribute to India’s positive outlook.
Contrasting Fortunes of India and China
India’s 25% profit increase starkly contrasts with China’s 89% decline in profit, dropping from $3.40 billion in 2022 to $371 million in 2023. China’s financial downturn was primarily attributed to losses in wealth management, personal banking, and corporate sectors.
HSBC’s Strategies for Growth in India
- Bolstering Wholesale Franchise: HSBC aims to strengthen its wholesale franchise by tapping into corporate supply chains in India.
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Capitalizing on Indian Diaspora Wealth: The bank plans to leverage the wealth pools of the Indian diaspora with the launch of onshore Global Private Banking services.
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