Here is a warning for foreign banks scaling down retail loan portfolios in developed markets and looking to tap new growth markets in Asia. As high as 81 percent of consumers in emerging Asian markets and 63 percent of consumers in developed Asian markets consider it important to deal with a local institution, says a McKinsey Global Institute survey of 20,000 individuals in 13 Asian countries.
In India, this percentage surges to 95 percent, a jump of 20 percent over the survey conducted in 2007. “We speculate that these changes reflect Asian consumers’ anxiety over the safety of foreign banks in the aftermath of the financial crisis,” the survey says. It is not surprising that HSBC India CEO Stuart Davis — an expat manager himself — admitted that the bank was losing talent to local banks in India and faced higher wages in the country. According to a report in Bloomberg, he said this was unheard of earlier.