HSBC to take on Scotland's corporate banking giants

BANKING giant HSBC has unveiled ambitious plans to boost its operations north of the Border in a move that will see it gearing up to take on Scottish rivals in the corporate banking market.

The plans to step up the pressure on the established Scottish banks was revealed yesterday by the newly appointed Scotland chief executive of Britain's biggest bank.

Speaking on the day of his appointment, John Rendall revealed HSBC's strategy to further expand its business banking team. He also promised to open additional retail branches north of the Border.

Rendall disclosed that HSBC had already increased corporate lending north of the Border by 46 per cent in the four months to the end of April, compared with the same period in 2008. Loan value grew to £744 million in the period, while revenue generated from the division rocketed by 80 per cent.

HSBC has previously flagged its independent status – it has not been forced to turn to the government for financial help – as attractive to companies looking for loans.

Although it has not specified which institutions are its targets it is clear it has Royal Bank of Scotland and Bank of Scotland – previously the major players in the Scottish market – in its sights.

HSBC has already invested in its corporate activity in Scotland. Last year it opened a new north of Scotland commercial centre in Aberdeen and Inverness and established a new leveraged finance team in Aberdeen.

Scots-born Rendall, who is to take on the new role after a two-year stint as chief operating officer in Mexico, told The Scotsman: "We are very pleased with how the parts of our business have been developing in Scotland over the past few years, especially in the corporate banking sector. We have got bigger plans for Scotland – you might call them ambitious plans."

Rendall, who grew up on Orkney and studied at St Andrews University, has worked at HSBC for 22 years.

Although he said it was "too early" to give full details of the bank's planned expansion, he revealed that it was likely to focus on developing corporate banking as well as targeting potential international personal banking customers living in Scotland.

He said HSBC was set to open new branches in Scotland, but was reluctant to give an indication of how many or where they would be located. However, he said the bank – which has six branches north of the Border in Edinburgh, Glasgow, Aberdeen, Inverness and Perth and employs 3,000 staff in Scotland – was not looking to challenge the likes of Bank of Scotland, now part of Lloyds Banking Group, on the Scottish high street.

He said: "We will be making investments in branches, but we are not looking to spend the next ten years opening tens of hundreds of branches."

In the new management structure, Irene Grant will remain as Scottish head of commercial and corporate banking.

The bank recently reported strong first-quarter results, following a successful £12.5 billion rights issue earlier this year.