HSBC Holdings Plc has named Naina Lal Kidwai, the group general manager and CEO of HSBC India, as the chairwoman of the group in India, effective 15 April 2009.
Stuart Davis, who was leading HSBC in Australia for the past seven years, will succeed Kidwai as the new CEO in India.
Stuart would report to Kidwai. All the other group companies' CEOs would also report to her.
Announcing the new designations in Calcutta yesterday, Stephen K Green, the group chairman of HSBC said the compound annual growth rate of banking operations in India for the last three years was 46 per cent.
''So, we decided to appoint an overall country head for all the businesses and a new CEO for banking,'' he said.
''I have to devise a strategy - especially for new businesses like insurance and ILFS Investmart which we recently acquired - nurture them and grow. I need to bring in a basic level of integration in all operations,'' Kidwai said after about her new position.
Davis said India featured among the top 10 countries for HSBC. Business in India was growing significantly in areas of banking, insurance and broking.
Sandy Flockhart, CEO of HSBC Asia Pacific, said ''these appointments reflect the growing significance of India in HSBC's global growth story. As one of the fastest growing economies in the world, India plays a critical part in the group's strategic focus on emerging markets.''
Naina Lal Kidwai has been at the helm of the Bank in India, as CEO and Deputy CEO, for the past five years. Prior to that, she was vice-chairman and managing director of HSBC Securities and Capital Markets India.
HSBC in India has grown significantly with pre-tax profit increasing from $33 million in 2004 to $666 million in 2008. The Indian operations, which employ over 37,000 people, make up 11 per cent of HSBC's overall worldwide business.
In 2008, HSBC expanded its scale of operations in India by acquiring IL&FS Investsmart, and launching Canara HSBC Oriental Bank of Commerce Life Insurance Company, a three-way venture between Canara Bank, Oriental Bank of Commerce and HSBC Insurance (Asis Pacific) Holdings with 51 per cent, 23 per cent and 26 per cent, respectively. It collected a fresh premium of Rs298.7 crore for the nine and a half months ended March 2009.
Additionally, HSBC Asset Management (India) continues to grow its business, with its investment arm HSBC Mutual Fund winning the Employees Provident Fund Organisation mandate to manage a $5 billion portfolio.
Green said ''India and China are two key markets for HSBC globally. The new structure will help us grow our business here more strongly in the future,'' Green said.
With Europe reeling under recession, HSBC hopes Asia, excluding Japan, will lead growth. Green said HSBC expects India's economy to expand by 6.2 per cent in the just-concluded financial year (2008-09) and by 8 per cent in 2009-10, which would be at par with China's. It is estimated that Asia will grow by 4.5 percent during the same period.
Meanwhile, the bank has decided to go slow on consumer credit business in the present calendar year following a high level of "impairment" of assets.
''There is no point in growing the retail asset portfolio of the bank at a time when other banks are either reducing their exposure or shutting it down. However, we will continue to do lending in the retail space,'' Kidwai said.
HSBC's retail credit portfolio stood at $40 million as on December 31, 2008, growing by 15 per cent during the previous calendar year (January-December 2008).
Recently, HSBC Holdings has raised $18 billion for expansion from rights issue. Green said the bank would utilise the proceeds of the rights issue for growth.
"We will look at opportunities for growth in the next year. The rights issue would be of help," he added.
Apart from banking, which was started in 1855, HSBC is into insurance, insurance broking, investment banking, capital markets, asset management, software development and global resource operation. The financial services group employs about 37,000 people in India, with 7,000 in banking.