HSBC India’s profit before tax increased by 33 per cent year-on-year to $451 million during January to June this year. India contributes approximately 4 per cent to the group’s profits.

The growth came from mainly commercial banking and global banking and markets segment, even as the bank cut down the losses in its retail banking and wealth management segment.

The retail banking and wealth management segment saw a loss of $4 million during the six-month period, lower than $50 million in the first half last year.

The commercial banking segment saw a profit before tax (PBT) of $78 million ($39 million) and the global banking and markets segment saw a growth of $292 million ($245 million).

The total loan book was flat at $6.1 billion. Out of this, the commercial and corporate loans were about $4 billion, residential mortgage $949 million, property related loans $739 million and personal loans and unsecured loans $446 million.

“The loan growth was flat because there was high demand for External Commercial Borrowings from our corporate clients and these are booked offshore in our overseas book,’’ said Mr Sutart Davis, Chief Executive Officer, HSBC, India, while announcing the bank’s results.

The bank will continue to grow its unsecured book in a calibrated and controlled manner, he added.

About the impending merger of Royal Bank of Scotland’s Indian retail and commercial business with HSBC, Mr Davis said the bank is still awaiting approval from the Reserve Bank of India.

“The key issue is around the fact that RBS is selling part of their business. So, RBI has to consider it carefully since it has no precedent,’’ Mr Davis said.

HSBC currently has 50 branches and is awaiting the final decision on the merger with RBS before opening more branches, he added.

Asia profits up 16%

In the first half of 2011, HSBC’s Asia businesses reported a PBT of $6.8 billion, up 16 per cent from the corresponding year-ago period. As a contributor to overall group performance, HSBC Asia accounted for 59 per cent of the group’s total PBT.

Net fee income grew 17 per cent to $2.7 billion, as there was a strong demand for wealth management and trade finance products. The loan growth in H1 was 13 per cent.

The bank would be more cautious in the second half due to issues like debt crisis in the Eurozone and in the US and the political turmoil in the Gulf region, said Mr Peter Wong, CEO, of HSBC, Asia-Pacific.

With regard to job cuts and layoffs, Mr Wong said that there will be reallocation of resources as the bank is trying to streamline its operations and IT systems.

In India, the attrition is already high as there is a war for talent. The headcount in India could grow if the Indian economy grows. But there is no guarantee that every single entity in the group will grow, Mr Wong said.

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