Five years after it entered the segment by pumping in over $290 million, British financial giant HSBC on Thursday said it will shut its struggling retail brokerage and depository business in India.
Nearly 300 employees of the company stand to lose their jobs due to the decision, according to sources, though the UK firm said it remains committed to the market, where it employs over 30,000 at the group level.
Following the decision, the bank said there will no new client additions with immediate effect, while existing clients will be informed of a date of discontinuation and will continue to offer the services till the shutdown.
“We are discontinuing its retail broking and retail depository services business here, operated under HSBC InvestDirect Securities,” HSBC India said in a statement.
“Impacted employees will be offered a fair and equitable severance pay in line with HSBC policy, and career transition services will be extended through a professional agency,” the statement added.
HSBC India entered the retail brokerage business in May 2008 — only months ahead of the financial crisis — by acquiring a 73.2% stake in IL&FS Investsmart for $241.6 million.
This was followed by an open offer, which took up the stake to over 93%, taking total investment to $296 million. It had subsequently delisted the company.
(with agency inputs)