Hong Kong and Shanghai Banking Corp Ltd (HSBC), Europe’s largest lender with close to $3 trillion in assets, plans to step up on its retail business in India to tap the increasing non resident Indian (NRI) segment and also the growth in wealthy clients, five years after shuttering its private banking business and cutting its branches by half.India CEO Surendra Rosha said the bank will enhance its product capabilities and invest in digitisation of its retail offering as it seeks a turnaround in the business.”We have had challenges in the past. We have right sized the business a few years ago. But now we feel we have the requirements we need now and are really going to be focussing on being a preferred bank for NRIs keeping in mind our global network. We want to rebuild our wealth capabilities because there is increasing wealth in India and wealth seeks diversification in the context of avenues to invest so we can play a role there,” Rosha said in an interview.HSBC’s push towards retail comes five years after the British bank shut its private banking business in India, amid an investigation by India’s tax department against individuals who had unaccounted foreign currency accounts in the bank’s Swiss branch. This was followed by a reduction in branches to 26 from 50 as the bank embarked on a global cost cutting spree.However as the move towards digitisation gathered pace post Covid, more importantly with shifting customer behaviour, it has reduced the importance of a large branch network.”Post Covid, the need for digital investments has really been brought out,” Rosha said adding that the bank plans to increase investments in digital products to support retail banking offerings and also capture more NRI business from its vast network abroad.”The Indian diaspora which banks with us in US, Canada, Middle East and UK have been asking to be connected better. So the India business has to do that better. It requires digital because these folks are living abroad and cannot come to to our branches,” Rosha said.To be sure, the bank’s global banking and markets (GBM) division which services large corporations and also includes treasury income contributes more than half of the bank’s profit before tax (PBT). Results released earlier this month showed that the bank’s PBT rose 2% $1.02 billion led by the $593 million profit made by GBM business in 2020.Profit from the retail banking and wealth management declined 76% to just $16 million from $67 business showing the impact of the Covid 19 pandemic on smaller enterprises and individual accounts.Rosha acknowledged that the economic disruption caused by the Covid pandemic has increased stress particularly in retail loans but expressed confidence that a faster than expected economic recovery will ensure the stress is transitory.”The one area there is clearly stress is some of the retail and insecured lending which we are working through and I dont think thats going to be material in 2021. I have no doubt that its a good area to continue to remain in. This is fact of the crisis we have been through, we cannot be immune to it. Some businesses have shut some have lost jobs so how we work with out customers to overcome these challenges is critical,” he said.HSBC will continue to focus on its strength through its global network while tapping the Indian diaspora abroad, he added. The bank hiked its provisions in India like it did around the world to deal with expected credit losses (ECL) on loans that could go bad. The bank made $94 million provisions on corporate loans in 2020 almost double the $50 million it had set aside in 2019. Provisions for personal loans also increased two times to $54 million from $26 million in 2019.But Rosha said provisions will come down to near its long term average in 2021.”Broadly economic recovery as shown by the high frequency data is sustainable but we need to keep certain markers in mind like there will be rotation of pent up consumption shifting to certain actions around infra….foreign investors are looking at certain milestones like what assets get privatised in fiscal 2021-2022,” he said.