By Nupur Anand

MUMBAI (Reuters) -HSBC Holdings PLC plans to relaunch its India private banking business within a year, its India CEO told Reuters on Thursday, after the Asia-focused lender has identified the country as a key strategic market for growth.

HSBC exited the Indian private banking business in 2015 as part of a group strategy. The lucrative but very competitive Indian market has few foreign players in a segment catering to high-net-worth individuals.

The London-headquartered bank is preparing to relaunch the business in India at a time when its increasing its focus on Asia, which is the biggest region in terms of its profit generation with Greater China and India among its main markets.

“We can see the amount of wealth creation in India and the growth in the number of millionaires … so an in-principle decision has been made to re-introduce private banking in India,” Hitendra Dave, CEO, HSBC India said.

“We are running through the process of internal approvals and it may take anywhere from six to 12 months and will include a full suite of private banking products,” he said in an interview.

Currently, HSBC focuses on catering to wealthy Indians from its global hubs in Singapore, London and the Middle East.

Nuno Matos, HSBC global CEO of wealth and personal banking, which includes the private banking business, told Reuters in November last year that the bank was exploring whether to re-enter onshore private banking in India.

HSBC earned just over half of its revenue and about two-thirds of reported pretax profit in 2021 from Asia. It has increased its focus on Asia by moving global executives and ploughing billions of dollars into the lucrative wealth management business.

The bank also aims to as much as quadruple its customer base in India in different business segments over the next three to five years, Dave said, taking advantage of some foreign rivals shrinking their business and growing wealth in the country.

HSBC India’s profit before tax rose 9% to $1.11 billion in 2021 from $1.02 billion in 2020 led by a 42% growth in income from its commercial banking business, which includes medium and small enterprises.

“Over the years the group has invested $4.5 billion into the country. In the last few years we have managed to grow without needing extra capital and that may continue in the foreseeable future also,” said Dave.

The lender last year agreed to buy the mutual fund arm of India’s L&T Finance Holdings for $425 million, and also plans to increase its stake in the insurance joint venture.

“HSBC has identified India as one of its top strategic market and we have a huge potential for organic growth but we may also look at inorganic growth if an opportunity arises,” said the India CEO.

(Reporting by Nupur Anand; Editing by Sumeet Chatterjee and David Evans)