London-based HSBC said on Thursday it will exit its retail broking business in India, the latest global bank to scale back operations in the country.
About 300 jobs will be cut as a result, a spokesman said.
A source involved in the process said the bank decided to exit the business due to stiff competition in retail broking and low earnings potential.
“HSBC will cease opening new retail broking accounts with immediate effect,” the bank said in a statement.
HSBC, Europe’s biggest bank, has exited about 50 businesses globally since Chief Executive Stuart Gulliver took over at the start of 2011, including recent profitable sales of a $9.4 billion stake in Ping An Insurance and its $2.1 billion Panama business.
HSBC, one of the three biggest foreign banks in India, was also said by sources to be in talks to sell a stake in its life insurance joint venture in India.
Global banks have scaled back non-core operations, including in India, where the economy grew last year at its slowest in a decade. Royal Bank of Scotland recently sold its Indian commercial and retail operations, and Morgan Stanley sold its private wealth management business in the country.
India’s brokerage industry is fragmented and competitive, with low commissions and sluggish business, and several smaller brokerages have closed up shop in recent months.
“Thousands of small brokers have exited and many are exiting everyday,” said Sudip Bandyopadhyay, CEO of Mumbai-based brokerage Destimoney Securities.