Indian economy may be showing signs of recovery, but major foreign banks in the country are yet to breathe a sigh of relief and are still cautious on their business plans.
Moreover, hit by rising non-performing assets (NPAs), most foreign banks are now drastically cutting down their retail business
?We are currently focusing on small-ticket personal loans only for existing customers, but remain cautious on that front. We have increased our focus on the mortgage segment,? said Shyam Srinivasan, country head (consumer banking), Standard Chartered Bank. The bank?s corporate and retail portfolio is growing at a ratio of 70:30.
?Both our portfolios are doing well. We expect a similar growth for this year as well,? he said
Earlier, Neeraj Swaroop, chief executive, India and South Asia, had said the bank has witnessed a rise in its loan impairments due to an increase in unsecured loans.
He had also said the bank is now growing its personal loan portfolio slower than last year as the impairments have been mainly on the personal loan side.
?We have seen a rise in delinquencies in personal loans at 4-4.5%. Hence, we have slowed down on our personal loan portfolio since the second quarter of last year. However, credit card delinquencies have remained flat,? said Swaroop.
Simultaneously, HSBC India is expecting a strong growth in its corporate portfolio in the next 12-18 months. ?We would like to grow our mortgage book, which has been flat for sometime now, in another 2-3 years. We also expect to see a strong corporate portfolio and are looking at growing our loan book strongly,? said Stuart A Davis, CEO with HSBC India. The bank?s corporate portfolio is larger than the retail portfolio, added Davis.
Another foreign bank, which did not wish to be named, launched its retail business, starting with credit cards with a big bang, witnessed losses in the portfolio, and has decided to go slow on the same. ?We are currently focusing only on top platinum cards, after checking for the customer?s credibility and relationship with the bank well,? said the executive.
Even as credit growth in the banking sector has fallen to 9%, foreign banks have witnessed a negative growth of 16% as on October 9, 2009, compared to 33% growth during the same period last year.
