HSBC CEO: Dollar Still the Boss, India the Next Big Boss

Image Source: Asian Banking and Finance

HSBC Group CEO Georges Elhedery, in an exclusive interview with The Economic Times, reiterated his strong belief in the US dollar's unchallenged status as global reserve currency. Elhedery downplayed forecasts of the dollar's demise as being premature, highlighting its primacy in cross-border trade, finance, and payments. The US dollar is 80% of global trade finance, 60% of central bank reserves, and 50% of global payments, according to him. Though he admitted that diversification into other currencies is on the rise, he stressed that no alternative even comes close to challenging the dollar's dominance in the foreseeable future.

Looking at India, Elhedery pointed out the country's distinct and accelerating growth path. He forecasted that India will be the world's third-largest economy by GDP before the end of the decade, fueled by robust macroeconomic and geopolitical stability. HSBC is doubling down in India, even as other international banks retreat from retail banking. The bank just got the go-ahead to open 20 new branches, raising its network to more than 26. The expansion targets the rich and growing middle class, providing them with international access and multi-geographic banking services-amenities that distinguish HSBC from local players.

Elhedery announced that India is among HSBC's priority markets worldwide in the top four. The bank is investing heavily in people, technology, and infrastructure to win a greater proportion of the rapidly growing corporate, institutional, and wealth management businesses. HSBC already has 45,000 employees in India and continues to hire and expand its branch network.

On potential acquisitions, Elhedery added that HSBC is still keen on inorganic growth in India, especially in wealth management, but any transaction needs to provide clear scale, digital capabilities, or product strengths without detracting from organic growth.

In the future, Elhedery believes that India will be one of the top three revenue contributors to HSBC, and growth rates to its customers and overall economy. He is very positive on the economic prospects of India and highlights that it has a talent pool, technology infrastructure, and stable environment as major drivers for the continued investment and growth of HSBC in the country.

Sources: The Economic Times, HSBC Annual Report 2024