Home / World Business
Fri, Jun 22, 2007 - Page 10 News List

HSBC to focus on emerging markets

BLOOMBERG

A man stands next to HSBC headquarters in Hong Kong on May 22. HSBC Holdings Plc's incoming Asia chief Sandy Flockhart said yesterday that the bank was changing strategy and refocusing on emerging markets.

PHOTO: AP

HSBC Holdings Plc, the world's third-largest bank by market value, will step up expansion in emerging markets such as India after mounting mortgage defaults at its US unit crimped profit, the company's incoming Asia chief said yesterday.

"We're going to have a finance-led emerging markets focus," shifting away from developed markets, said Sandy Flockhart in a telephone interview from Johannesburg.

Flockhart, who takes over HSBC's Asia operations next month, said he planned to increase hiring in countries, including India and China.

The London-based bank, which gets almost 40 percent of its pretax profit from Asia, is putting more emphasis on emerging markets to counter slower growth and rising consumer loan defaults in the US and the UK.

Flockhart should invest more in countries such as India, Taiwan and South Korea, analyst Kevin Chan at Nomura International (HK) Ltd said.

"They need to put more emphasis in particular on India," Chan said. "Competition is increasing every day."

HSBC said on Wednesday that Flockhart would take control of its Asia unit -- The Hongkong and Shanghai Banking Corp Ltd -- next month.

The 55-year-old has headed HSBC's Latin American and Caribbean unit since October. He replaces Michael Smith, who's joining Australia & New Zealand Banking Group Ltd as chief executive officer.

The biggest banks in India, the world's second-fastest growing major economy, may raise a combined US$10 billion selling stock in the year through March next year, as they seek to finance growing demand for loans. HSBC has 69 offices in the country, its Web site said, trailing Standard Chartered Plc's 81.

HSBC will focus on building its consumer and private banking business in India, Flockhart said.

"The middle class is growing, so that's where we can focus a lot of our efforts," he said.

It is too early to say how many branches HSBC will open in India or how much money it will spend there, he said.

Comments will be moderated. Keep comments relevant to the article. Remarks containing abusive and obscene language, personal attacks of any kind or promotion will be removed and the user banned. Final decision will be at the discretion of the Taipei Times.

TOP top