According to news published in The Independent, HSBC has become the first British bank to secure a retail-banking license in Russia.
Good news for HSBC bank, according to news published in The Independent, HSBC has become the first British bank to secure a retail-banking license in Russia. The company was given a green signal to launch retail-banking services to Russian citizens by the central bank of Russia.
HSBC is set to give Russians wide array of services, including deposits, loans, mortgages, credit cards and asset management. The pivotal factor here is that HSBC already has a growing corporate and investment banking business in Russia and an office there, but getting an all important license is a significant step towards becoming the first British bank to have a retail presence in the market of Russia.
The growth of consumer demand is generated from significant increases in real disposable incomes and continued intensive consumer borrowing. "Retail deposits in the banking system grew almost 38% in 2006 and that growth rate has accelerated slightly since the start of 2007 to just fewer than 39% through the end of February", according to Central Bank data.
Lots of foreign banks have set up quality retail-banking business in the country. And, they are ruling the roost in the market solely on corporate business' basis, aggregate retail and asset growth. It is worth mentioning in this regard that the capital's economical borrowing at overseas markets has provided them with a much-needed cushion to refinance credit portfolios. Because of this, large chunk of Russian banks can't compete with foreign players, as they need to borrow at relatively less favorable circumstances, which is not that straightforward especially when you take into consideration the present consumer boom and declining rates of interest.
As per a research analyst at RNCOS, "Retail banking market in Russia was "crying out for top quality service from international competitors." With HSBC coming into the fray, people of Russia will not only get quality service but increase in competition can leads to decline in rates as well".
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