HSBC India profit dips in first half; customer accounts see over $500 m plunge

UK-based global banking giant HSBC has seen its first-half profit from India business falling to $ 414 million in 2013, amid a decline of over $ 500 million in customer accounts since the beginning of this year.

According to the bank’s interim financial report, its customer accounts balance in India fell to $9.85 billion as on June 30, from $10.41 billion at the beginning of 2013.

While the bank did not specify any reason for the decline in customer accounts, it said that the profits from India fell to $414 million in the first half of 2013, from $515 million in the same period last year.

The bank also said it is cooperating with US authorities with respect to a probe into suspected violations of tax laws involving US-based clients of an HSBC company in India.

“In April 2011, HSBC Bank US received a summons from the US Internal Revenue Service directing HSBC Bank USA to produce records with respect to US-based clients of an HSBC company in India.

“HSBC Bank USA has cooperated fully by providing responsive documents in its possession in the US to the US Internal Revenue Service,” the global banking major said.

HSBC’s global banking and markets business contributed more than half of the profits in India at $ 255 million, while retail banking and wealth management segment posted a small loss of $ one million in the first half of 2013.

In the first half of 2012, the bank had posted a profit of $ 35 million in retail banking and wealth management segment, while global banking and markets segment had also registered a higher profit of $ 306 million.

Its loans and advances to customers, however, rose to $ 6.8 billion in the first half of 2013, from $ 6.7 billion in the same period last year.

The bank said it continues to leverage its distinctive international network and business model, through offerings like providing “advisory services to multinational corporates, helping them enhance their stakes in locally-listed subsidiaries in India”.

Overall, HSBC has reported a profit before tax of $ 14.1 billion, an increase of 10 per cent, for the first half of 2013. Its revenue, however, fell by 7 per cent to $ 34.4 billion. London-based HSBC is present across 80 countries including India and has been one of the biggest foreign banks present in the country.

Source: thehindubusinessline