Latest news with #SaloniShukla
Economic Times
16-05-2025
- Business
- Economic Times
HSBC CEO Georges Elhedery discusses US dollar's continued dominance and growth opportunities in India
Agencies Let's call India one opportunity. I want to call out wealth and transaction banking as great opportunities. if there's any fallout in the (tariff) negotiations that are taking place. The world's reserve money and the primary currency for cross-border trade payments, the US dollar, wouldn't lose its lustre through the remainder of his banking career, HSBC Group chief executive Georges Elhedery tells Saloni Shukla and Sangita Mehta, arguing that predictions of its diminished role in global business might be rather premature. This exclusive interaction with the head of Britain's largest bank by market value discussed subjects as diverse as the lender's somewhat contra bets on Indian retail banking, the outcome of new trade pacts in a tariff-torn world, and the likely future winners in an investment universe that's literally adding a new asset class every trading week. Edited excerpts: Two important trade deals that have recently happened, one between UK and India and the other between US and the UK. Could you take us through how, broadly, these two deals influence your business? Well, essentially these two deals influence the business of our customers, and therefore, by serving them it influences our business. So what matters for us most is what kind of opportunities they can explore due to the various opportunities that were created in these once we go through the phase of advice with our customers, we then support them with all our products and services. HSBC has just become the UK's most valuable company. Could you describe what are the tailwinds that might have helped your company at this juncture to get there?Look, so without specifically commenting on share price, I am pleased that the share price is recognising the performance of the bank. The first one is we've been demonstrating momentum in our business. And the momentum starts with the bread-and-butter business we do for our clients, which is deposits, which is basically being the safeguarding of their wealth. Then obviously there are the transaction banking, the wealth and the lending financing capabilities we provide. We have demonstrated very strong momentum all the way in our Q1 second one is as a management team we have demonstrated that we're very disciplined in doing what we do. And our mandate is to serve our customers where we can be the most competitive and make the biggest difference in how we serve then the third element that has also helped us is the fact that we are confident in our ability to meet our targets to achieve mid-teens return on tangible equity for the years 2025, 2026 and 2027. Given the redrawn trade priorities, which currency do you think will emerge as a competitor to the US dollar? For the rest of my career, probably the rest of my life, there would be no competitor to the US dollar. As a global reserve currency, a global store of value, a global transaction currency, the dollar is today 80% of trade finance globally. The dollar is 60% of reserve managers' assets. The dollar is 50% of global payments. So there is no alternative to the dollar. The fact that there will be more of other currencies used in trade or in payments or for reserve management is part of the diversification exercise, but none of which will be anywhere near, if you want, individually anywhere near the dollar. But collectively, yes, there will be more diversification. And they will take a little bit more space, but individually, I don't see a challenger to the US dollar for the rest of, certainly my career, possibly my life. How do you look at the opportunity for HSBC India? And under your leadership, what will be your priority here for the bank? India is uniquely positioned on this planet as a massive growth opportunity. Before the end of this decade, India will become the third-largest economy by GDP. This scale we are talking about has shifted materially over the last serve most of the multinational businesses investing in India. We serve our Indian customers for all their needs domestically and also these corridors are growing and in many cases, they're growing at double-digit percentage. So our baseline is growing with our customers. Over and above this baseline, we have the ambition to continue taking market share among international banks by continuously investing by putting more resources both in our corporate institution space and in our premier and wealth-personal banking space. Those investments should and must allow us to continue gaining market share.I'm extremely optimistic about India. There is a stable economic outlook, there is a stable macroeconomic outlook, there is a stable geopolitical outlook, notwithstanding the horrible events of April 22, and all of this gives us a lot of confidence that our investment in India is well spent. Most international banks operating in India have actually scaled back their operations, especially on the retail side. You are actually heading in the opposite direction. So what is it that you're seeing that your rivals might be missing? First, we've been operating with 26 branches and now we have the approval to open 20 more in the personal banking space specifically, we see a lot of opportunities where we can differentiate from local banks. Remember India is a scale market and local banks who in many cases are business partners with us will have the scale to compete in the wide retail business. So we need a differentiated proposition to be able to play to our strength. Our differentiated proposition tends to be around the affluent or the rising middle class in India because we can give them elements local competition could not give them give them international access. The rising middle class wants to send their kids to universities abroad, they want holiday homes abroad, they want to expatriate abroad and work in other jurisdictions. They want this multi-geographic service. We can offer that differentiator to the affluent growing middle class - what we call premier banking. Given your optimism on India and focus on the affluent middle class, is HSBC currently considering any acquisitions in the wealth management space? The short answer is of course any inorganic opportunity that can accelerate the build-out of our capabilities in our strategic areas, we'll consider. The hurdle for acquisition is quite high for us because what we want in an acquisition is to win scale, digital technology capabilities or product specific capabilities. We want the acquisition to be, for the shareholder, accretive. We do not want the acquisition integration to distract our own teams from growing organically because you don't want a trade-off integrating an inorganic acquisition at the cost of your organic growth opportunities. Would you be putting more capital in India, given that India is one of the four growth priority markets that you've identified? These markets will have a lot of the investment requirements, specifically in the premier and wealth they'll obviously have the investment requirements for corporate institutional banking, where we're already in the dominant position, but we need to keep improving our product and capabilities. And our customers' needs are growing. We need to be able to grow with them and faster than them because we need to pre-empt their future needs as those investments will definitely grow. That means investments in people. We already employ 45,000 people in put investment in branches and that's back to the 20 new branches, as well as the upgrading and uplifting of our existing branches. It's easy in India because you have the talent, skills and underlying infrastructure that's very technology friendly - starting with Aadhaar and everything on top. So we keep investing in the capital generation of the entity has been fantastic and we're using that capital generation to carry on the growth. So in the next five years, with all the investments that you plan to make, do you see revenues from India growing? So as a geography, running two businesses, corporate institutional banking and then wealth and premier banking, India would rank in our top three, top four, very good, top three — a very important market. In terms of contribution to the group, we do expect India to well first, keep growing at the base rate of our customers growth rate, grow even further. but that's the opportunity in front of us. So the growth that we should be expecting has to be commensurate to the underlying economic growth, our customers' own growth and the fact that we're taking market share from our competitors. So which is the asset class you think that smart money will chase five years from now? Look, I think the value of a diversified portfolio across asset classes and geographies... But it doesn't answer your specific question, but it will answer how you best protect your wealth in the long term. Because there may be winners and losers over periods of time, but the best way, if you're managing a comprehensive portfolio, remains diversification of your assets. The asset class I would still be cautious about today, whether we can call it asset class is still debatable, but is anything related to crypto space. It's unregulated until it is regulated, until the regulation gives us sufficient comfort in the prudential rules behind them, the financial crime rules and KYC and what have you rules behind them, the systemic risks they pose, until all of that is addressed through a very comprehensive set of regulations. Like you'd regulate asset managers or mutual funds or banks, it will not be something we will operate in, and today we do not operate in this space. Identify two opportunities and two risk factors for your bank in the next five years? Well, since I'm here, Let's call India one opportunity. I want to call out wealth and transaction banking as great opportunities. if there's any fallout in the (tariff) negotiations that are taking place. So for many countries July 9 is a very important day because our customers get more clarity on how they can transact internationally. Hopefully, that risk factor we can eliminate over the course of the next few months with better clarity and better fairness. But we want them to still operate as a global trade with the right fairness considerations in mind. That's a risk factor. The other risk factor is cyber. And it's not something we bankers would think about morning and evening, but it's something we spend money on morning and evening. But through Gen AI, you have endless means for fraudsters to make our customers victims. And, that would be one of the kinds of core areas where we invest in to protect our customers.
Time of India
16-05-2025
- Business
- Time of India
HSBC CEO Georges Elhedery discusses US dollar's continued dominance and growth opportunities in India
The world's reserve money and the primary currency for cross-border trade payments , the US dollar , wouldn't lose its lustre through the remainder of his banking career, HSBC Group chief executive Georges Elhedery tells Saloni Shukla and Sangita Mehta, arguing that predictions of its diminished role in global business might be rather premature. This exclusive interaction with the head of Britain's largest bank by market value discussed subjects as diverse as the lender's somewhat contra bets on Indian retail banking, the outcome of new trade pacts in a tariff-torn world, and the likely future winners in an investment universe that's literally adding a new asset class every trading week. Edited excerpts: Two important trade deals that have recently happened, one between UK and India and the other between US and the UK. Could you take us through how, broadly, these two deals influence your business? Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like Join new Free to Play WWII MMO War Thunder War Thunder Play Now Undo Well, essentially these two deals influence the business of our customers, and therefore, by serving them it influences our business. So what matters for us most is what kind of opportunities they can explore due to the various opportunities that were created in these agreements. And once we go through the phase of advice with our customers, we then support them with all our products and services. HSBC has just become the UK's most valuable company. Could you describe what are the tailwinds that might have helped your company at this juncture to get there? Look, so without specifically commenting on share price, I am pleased that the share price is recognising the performance of the bank. The first one is we've been demonstrating momentum in our business. And the momentum starts with the bread-and-butter business we do for our clients, which is deposits, which is basically being the safeguarding of their wealth. Live Events Then obviously there are the transaction banking, the wealth and the lending financing capabilities we provide. We have demonstrated very strong momentum all the way in our Q1 results. The second one is as a management team we have demonstrated that we're very disciplined in doing what we do. And our mandate is to serve our customers where we can be the most competitive and make the biggest difference in how we serve them. And then the third element that has also helped us is the fact that we are confident in our ability to meet our targets to achieve mid-teens return on tangible equity for the years 2025, 2026 and 2027. Given the redrawn trade priorities, which currency do you think will emerge as a competitor to the US dollar? For the rest of my career, probably the rest of my life, there would be no competitor to the US dollar. As a global reserve currency, a global store of value, a global transaction currency, the dollar is today 80% of trade finance globally. The dollar is 60% of reserve managers' assets. The dollar is 50% of global payments. So there is no alternative to the dollar. The fact that there will be more of other currencies used in trade or in payments or for reserve management is real. It's part of the diversification exercise, but none of which will be anywhere near, if you want, individually anywhere near the dollar. But collectively, yes, there will be more diversification. And they will take a little bit more space, but individually, I don't see a challenger to the US dollar for the rest of, certainly my career, possibly my life. How do you look at the opportunity for HSBC India? And under your leadership, what will be your priority here for the bank? India is uniquely positioned on this planet as a massive growth opportunity. Before the end of this decade, India will become the third-largest economy by GDP. This scale we are talking about has shifted materially over the last decade. We serve most of the multinational businesses investing in India. We serve our Indian customers for all their needs domestically and also overseas. All these corridors are growing and in many cases, they're growing at double-digit percentage. So our baseline is growing with our customers. Over and above this baseline, we have the ambition to continue taking market share among international banks by continuously investing by putting more resources both in our corporate institution space and in our premier and wealth-personal banking space. Those investments should and must allow us to continue gaining market share. I'm extremely optimistic about India. There is a stable economic outlook, there is a stable macroeconomic outlook, there is a stable geopolitical outlook, notwithstanding the horrible events of April 22, and all of this gives us a lot of confidence that our investment in India is well spent. Most international banks operating in India have actually scaled back their operations, especially on the retail side. You are actually heading in the opposite direction. So what is it that you're seeing that your rivals might be missing? First, we've been operating with 26 branches and now we have the approval to open 20 more branches. Second, in the personal banking space specifically, we see a lot of opportunities where we can differentiate from local banks. Remember India is a scale market and local banks who in many cases are business partners with us will have the scale to compete in the wide retail business. So we need a differentiated proposition to be able to play to our strength. Our differentiated proposition tends to be around the affluent or the rising middle class in India because we can give them elements local competition could not give them inherently. We give them international access. The rising middle class wants to send their kids to universities abroad, they want holiday homes abroad, they want to expatriate abroad and work in other jurisdictions. They want this multi-geographic service. We can offer that differentiator to the affluent growing middle class - what we call premier banking. Given your optimism on India and focus on the affluent middle class, is HSBC currently considering any acquisitions in the wealth management space? The short answer is of course any inorganic opportunity that can accelerate the build-out of our capabilities in our strategic areas, we'll consider. The hurdle for acquisition is quite high for us because what we want in an acquisition is to win scale, digital technology capabilities or product specific capabilities. We want the acquisition to be, for the shareholder, accretive. We do not want the acquisition integration to distract our own teams from growing organically because you don't want a trade-off integrating an inorganic acquisition at the cost of your organic growth opportunities. Would you be putting more capital in India, given that India is one of the four growth priority markets that you've identified? These markets will have a lot of the investment requirements, specifically in the premier and wealth space. And they'll obviously have the investment requirements for corporate institutional banking, where we're already in the dominant position, but we need to keep improving our product and capabilities. And our customers' needs are growing. We need to be able to grow with them and faster than them because we need to pre-empt their future needs as well. So those investments will definitely grow. That means investments in people. We already employ 45,000 people in India. We put investment in branches and that's back to the 20 new branches, as well as the upgrading and uplifting of our existing branches. It's easy in India because you have the talent, skills and underlying infrastructure that's very technology friendly - starting with Aadhaar and everything on top. So we keep investing in technology. But the capital generation of the entity has been fantastic and we're using that capital generation to carry on the growth. So in the next five years, with all the investments that you plan to make, do you see revenues from India growing? So as a geography, running two businesses, corporate institutional banking and then wealth and premier banking, India would rank in our top three, top four, very good, top three — a very important market. In terms of contribution to the group, we do expect India to well first, keep growing at the base rate of our customers growth rate, grow even further. but that's the opportunity in front of us. So the growth that we should be expecting has to be commensurate to the underlying economic growth, our customers' own growth and the fact that we're taking market share from our competitors. So which is the asset class you think that smart money will chase five years from now? Look, I think the value of a diversified portfolio across asset classes and geographies... But it doesn't answer your specific question, but it will answer how you best protect your wealth in the long term. Because there may be winners and losers over periods of time, but the best way, if you're managing a comprehensive portfolio, remains diversification of your assets. The asset class I would still be cautious about today, whether we can call it asset class is still debatable, but is anything related to crypto space. It's unregulated until it is regulated, until the regulation gives us sufficient comfort in the prudential rules behind them, the financial crime rules and KYC and what have you rules behind them, the systemic risks they pose, until all of that is addressed through a very comprehensive set of regulations. Like you'd regulate asset managers or mutual funds or banks, it will not be something we will operate in, and today we do not operate in this space. Identify two opportunities and two risk factors for your bank in the next five years? Well, since I'm here, Let's call India one opportunity. I want to call out wealth and transaction banking as great opportunities. if there's any fallout in the (tariff) negotiations that are taking place. So for many countries July 9 is a very important day because our customers get more clarity on how they can transact internationally. Hopefully, that risk factor we can eliminate over the course of the next few months with better clarity and better fairness. But we want them to still operate as a global trade with the right fairness considerations in mind. That's a risk factor. The other risk factor is cyber. And it's not something we bankers would think about morning and evening, but it's something we spend money on morning and evening. But through Gen AI, you have endless means for fraudsters to make our customers victims. And, that would be one of the kinds of core areas where we invest in to protect our customers.
Time of India
04-05-2025
- Business
- Time of India
Personal loans & credit card stress has moderated, but microfinance pain persists', Kotak CEO Vaswani says
Private lender Kotak Mahindra Bank is re-evaluating its long-term approach to the microfinance sector , citing limitations in the traditional joint liability group (JLG) model. In an interview, managing director and chief executive Ashok Vaswani tells Saloni Shukla that fiscal 2026 may bring new challenges due to global trade tensions and geopolitical risks . Edited excerpts: #Pahalgam Terrorist Attack India much better equipped to target cross-border terror since Balakot India conducts maiden flight-trials of stratospheric airship platform Pakistan shuts ports for Indian ships after New Delhi bans imports from Islamabad You've completed one full fiscal year at Kotak. How do you see it? There were speed bumps and headwinds that hit us last year, whether it was microfinance, unsecured loans or the technology ban. We are systematically working our way through each of these. Some issues are now completely behind us, and some need a bit more work. But every day isn't going to be rosy. Overall, I remain very bullish. I still believe that the journey we've embarked upon is the right one. Play Video Play Skip Backward Skip Forward Mute Current Time 0:00 / Duration 0:00 Loaded : 0% Stream Type LIVE Seek to live, currently behind live LIVE Remaining Time - 0:00 1x Playback Rate Chapters Chapters Descriptions descriptions off , selected Captions captions and subtitles off , selected Audio Track Picture-in-Picture Fullscreen This is a modal window. Beginning of dialog window. Escape will cancel and close the window. Text Color White Black Red Green Blue Yellow Magenta Cyan Opacity Opaque Semi-Transparent Text Background Color Black White Red Green Blue Yellow Magenta Cyan Opacity Opaque Semi-Transparent Transparent Caption Area Background Color Black White Red Green Blue Yellow Magenta Cyan Opacity Transparent Semi-Transparent Opaque Font Size 50% 75% 100% 125% 150% 175% 200% 300% 400% Text Edge Style None Raised Depressed Uniform Drop shadow Font Family Proportional Sans-Serif Monospace Sans-Serif Proportional Serif Monospace Serif Casual Script Small Caps Reset restore all settings to the default values Done Close Modal Dialog End of dialog window. by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like New Container Houses Vietnam (Take A Look At The Prices) Container House Search Now Undo What are your expectations for FY26? I think many of the headwinds we faced in FY25 are now behind us, allowing us to grow more aggressively. That said, new challenges may emerge. For instance, we'll need to adjust our business model in response to changes in repo rates. Tariff tensions under (US President Donald) Trump and broader geopolitical uncertainties are also unknowns. But our North Star is now defined and once the engine is moving in the right direction, acceleration becomes much easier. I'm hopeful we can ramp up quickly and avoid too many distractions. What's your strategy for microfinance? Live Events In the last two quarters, microfinance caused a lot of pain. Will it continue for one more quarter? Absolutely. Possibly two. That said, the business still made money, we didn't lose any. The real question is about scale. A business that is this cyclical shouldn't grow to a size where it keeps you up at night. We know this sector tends to blow up every 3-5 years. We need to find a way to temper that volatility. How do you plan to do that? We need to ask ourselves, is what we're seeing now cyclical, or structural? The JLG model can no longer be relied on for protection. If we're going to evaluate each customer individually, we have to consider how many of them have credit histories or are captured by credit bureaus. Then comes the question, what's the cost of such credit assessments, and how does that impact the business model? This is a business model that has to be rethought. Is the stress on unsecured lending easing overall? Stress in personal loans has come down. Credit card concerns have plateaued. In microfinance, however, we're still seeing stress. We've already reduced our exposure significantly. In Q1, there could still be some elevated stress, but we expect some relief after that. With the credit card embargo now lifted, how do you plan to grow that business? We love the credit card business and customers love their cards too. The real question now is how to offer a range of cards that appeal to various customer segments. So yes, we're reworking our credit card strategy and plan to pursue a much more aggressive approach in the coming months. FY25 saw notable leadership attrition at Kotak. How are you addressing this? Some of these people had been with us for a long time. They got new opportunities and that's okay. We have enough bench strength to manage the transition. A certain level of fresh thinking is a good thing. You explored IDBI Bank . IndusInd Bank is also facing issues. Is M&A a real possibility for Kotak? M&A is definitely an important route for us. But any such transaction must fit both strategically and financially. Just because we have the capital doesn't mean we'll do a deal for the sake of it. We evaluate every opportunity that comes our way, and if it mee-ts both those criteria, we'll go ahead.
