HSBC shutting down Brokerage business
Traders,
HSBC announced shutting down its brokerage business yesterday and this information is all over the news today. Firstly, for all the HSBC clients who might be in shock, business continues as usual for now until the management announces the date for closure of operations. HSBC had acquired the brokerage business from IL&FS back in 2008 for around $300 million at near the top of the last big bull market.
The reason for writing this blog is because of the calls received from our anxious clients on whether we are affected at Zerodha:
Market participation over the last 5 years has been on a downtrend, volumes have been almost stagnant, and people have been preferring to trade low yield products like options. You have to observe that operational costs going off the roof and many more such reasons are behind HSBC shutting down. I’m afraid the news is just the same for the many other brokerages who have been making losses over the last few years.
Zerodha went live amidst probably the most bearish phase ever for the Indian broking business in 2010, but has been profitable from the first year of operation. Not only have we been profitable but we also had a quarter-on-quarter growth over the last 3.5 years of being in business and are looking at maintaining the same growth rate with the launch of our new trading tools and platform in the next few months.
This growth has been achieved without compromising in terms of risk, performance or efficiency and we are continually looking at reducing costs and offering a lot more. Our profitability has also given us the leverage to work on new ideas, platforms and tools to help our clients win in an environment where most of our competitors are cutting costs, not spending on R&D or are simply shutting down.
To sum it all up, Zerodha has not been affected by the market scenario; we have been profitable over the last 3 years in business and have a target to better our offerings and also be the best in terms of Service, Technology and Pricing over the next 12 months.
For all the HSBC clients looking at opening new accounts, do consider Zerodha. Make sure you read the testimonials to hear what our clients are saying about us.
Happy Trading,
I like very much… So less Brokerage cost for HSBC
This would have been really a shock for existing HSBC customers. But I think it can’t be denied that things were getting messed up. Business need to keep up at pace with the market else they decline. Anyway, Zerodha is still serving well.
Actually this wasn’t surprising. Zerodha as a discount broker and for its growth is what people should use.
HSBC reached this stage just because of their policies and not market situation. Anyone can survive the bad phase in market only if they can strive for success and not by putting restrictions on each and every things.
Hi! I just had a question came across my mind. What if Zerodha doesn’t get new clients and becomes stagnant and the revenues begin to fall down?
Souvik, risk for any business in the world, 🙂 , so yeah we will hopefully keep innovating and continue adding clients…
Souvik Banerjee,
Its law of nature, fittest will always survive and who reluctant to change will perish.
Hope Zerodha keep coming up with innovative features and stays at top
It was not very surprising of HSBC shutting down. Their system was bad and didn’t have enough features. Customer service was worse, staffed by too few people. It always took 3 calls to fix one problem.
Keep it up Zerodha. Good luck for your continued success.
A friction arises and benefits are taken by those who have those ideas which can benefit others.
When zerodha started the product line ,yes….people wanted it and the result is seen today.-GROWTH OF ZERODHA
.We remember the online broking initiated by indiabulls and compared to icici direct then…
Zerodha have given what people wanted and yes you are successful.And we are really thankful to you for the same.
The growth in the initial phase will be immense till the market in general ACCEPT the shift in product lines and assimilate itself along the same, then zerodha may find itself to grow not vertically but shifting the growth horizontally in less % yoy or qoq.
but you are gearing yourself for the same and is really appreciable.
Till the people ,persons,institutions learners ,traders ,investors and all of the classes you are dealing with “are in profit” ……..zerodha will grow.This profit of others may be in various ways like learning the skill of trading ,reduction in trading cost,technology,support etc
Anyway road till date was great but please focus on “simplicity” of “others benefit” which you have always done and you will be returned in geometrical proportion.
All The Best.
Well said Chintamani,
Thanks
Dear Kamath Sir,
I have developed my own strategy by testing in various styles..now is it feasible to develop algorithm and connect to Zerodha Account to trade automatically with minimum supervision.. request you to give the road map for my idea..
Yes, you can. Check out https://kite.trade. Automation requires exchange approvals, so you can write to talk[at]rainmatter.com for assistance in this regard.
Day is not far when only brokers like Zerodha will exist and traditional brokers will have to become discount broker ……All the best to Zerodha……!!!! waiting for your new platform to come out….Will it available by year end….??