With losses of over $150 million in its retail lending business in 2008, HSBC Bank is not taking too many chances with its unsecured loans portfolio. ?We have started being very cautious on our unsecured lending, especially credit cards and personal loans, where we will be selective,? said Rajnish Bahl, head (personal financial services) at HSBC Bank, adding that for credit cards only the premium and mid-affluent segments would be targetted.
The size of the retail book, approximately at $2 billion, is divided more or less equally between secured and unsecured loans. The book shrank by about 20 % in 2009, but Bahl expects secured loan book grow 25-30 % this year. He said the bank would focus closely on growing mortgage segment. HSBC?s financial results for 2009 are expected next month.
Since the global crisis gripped the banking industry, Bahl said HSBC saw its credit card issuances drop to 1.5-1.6 million from 3 million about two years ago. ?During the crises, multiple cards were issued to the same person and cash flows became tight. Hence, we are seeing to it that the losses are very minimal. We are issuing only premium and platinum cards now,? he said. HSBC at present has about 15-16 lakh credit card customers and about 45,000-50,000 customers in the home loan segment. The bank exited its auto loan business about 4-5 years ago.
Currently, of the total retail portfolio, about 60-65% is in the form of secured lending. Bahl said the bank is currently disbursing home loans worth Rs 100-150 crore every month since interest rates have become affordable and property prices have corrected.
?The average home loan ticket size is about Rs 20-25 lakh and and we hope to lend about Rs 10,000-15,000 crore over the next 12-15 months,? said Bahl. HSBC has roped in Cibil to check credibility of customers.
The bank is looking to beef up the retail team, which currently comprises 3,500 people, and plans to hire 300-400 more this year. HSBC also plans to earn more from the distribution of products. Last month, HSBC widened its footprint by opening three new branches in India, taking the total number to 50.
