HSBC aims to grow unsecured retail biz in India

HSBC is looking to grow its unsecured Indian loan portfolio, mainly credit cards, its country chief executive said, as its retail operation moves towards a return to profitability in Asia's third-largest economy.
Banks in India slashed unsecured lending after personal loans and credit card dues turned bad following the global financial crisis. HSBC India saw a 46 percent drop in overall profit for the first half of 2009 as losses on retail lending more than doubled.
"At this stage, we are well positioned to grow our unsecured book, but we will do it in a cautious and calibrated way," Stuart Davis, who took over as India chief executive in April 2009, told Reuters in an interview on Tuesday.
"We won't be looking at open market sourcing as we did perhaps four or five years ago," he said, referring to the practice of issuing cards to customers who do not already have an account with the bank.
HSBC's expansion of unsecured lending in India comes as it is turning around the performance of its retail banking operations in the country, the sixth biggest contributor to the UK-based bank's group profit.
In the first half of 2011, HSBC, Europe's biggest bank, posted a loss of $4 million in its India retail banking and wealth management business, narrowing from a loss of $49 million a year ago.
Fewer than 18 million of India's 1.2 billion people use credit cards. In China, a country with a slightly higher population, more than 200 million credit cards were in use as of a year ago.
Foreign banks lack the branch networks of local lenders like ICICI Bank and HDFC Bank, India's biggest card issuers, but tend to attract the most well-heeled customers in a country where incomes are rising fast.
London-based Standard Chartered, one of the biggest foreign banks in India, expects growth of 30-35 percent in new customers this year, Shyamal Saxena, head of retail banking products, had said in July.
HSBC's overall first half pre-tax profit in India rose 32.6 percent to $451 million. The bank is on track to achieve its target of $1 billion in India overall profit in 2013, Davis said.
LOAN GROWTH
HSBC, one of the top three foreign commercial banks in India along with Citigroup and Standard Chartered, expects to grow its India loan book "at least in line" with the sector's growth in this fiscal year, Davis said.
The country's central bank expects credit growth at 18 percent in this fiscal year, down from an earlier projection of 19 percent. HSBC posted a 17 percent rise in demand for loans in the last fiscal year to end-March 2011.
India raised interest rates last week for the 12th time in 18 months, triggering worries about a slowdown in demand for corporate and retail loans from banks.
"There is certainly a slowdown in loan demand...(but) we are not looking at a situation that we are looking at in Europe and the U.S. where loan growth is negligible," he said, adding the bank also plans to grow its India mortgage loan book.
The bank's home loan book in India grew 11 percent in the first half of this calendar year to $949 million.
"We feel very positive about the growth scenario and our business here and in the absence of some unforeseen macroeconomic downturn here in India we are positive about our growth," Davis said.
The bank, which plans to shed 30,000 jobs globally in the next three years to cut costs, expects to raise its India banking operations headcount over the next few years from about 7,500 now on the back of growth in its business, Davis said.

Credit card companies offers good plans in festive season

What most spenders like about the festive season is the huge discounts, attractive schemes and offers most consumers durable companies come out on their products and services. With the economy picking up and the credit card usage increasing once again, card issuing companies too have tied up with various brands to offer tempting discounts, cash back offers, finance schemes.
And these offers are not just applicable on credit cards alone but are extended to some debit cards as well. “Apart from offering bonus points over and above the regular reward points earned on spending on the ICICI Bank credit cards and debit cards this season, we have come out with exclusive discounts on lifestyle and electronics too, “ says an ICICI spokesperson.
During the coming week, when you go shopping make sure you corner those extra savings and rewards that your credit card can offer you.
Apparel: You can avail discounts of up to 10% if you swipe your HSBC credit cards and Axis bank to purchase clothes. HSBC, for instance, has come out with festive scheme — Happy Swipes, where its credit and debit cardholders are eligible for cash back of 5% on making any purchase from Fabindia and Jashn stores on a minimum transaction of Rs 2,500 and Rs 5,000, respectively.
In case you wish to pick something from Star Bazaar this season, you can avail 5% cash back on a minimum spend of Rs 1,500. Under the cash back offer, the money gets credited to your account after the purchase has taken place. Similarly, by making a minimum purchase of Rs 3,000 on your Axis bank credit or debit card, you can avail additional 10% discount on purchase of any apparel at Central and Pantaloon outlets.
Dining: There is something for your palate too. As an American Express cardholder, if you book a flight to Hong Kong through Cathay Pacific Airline this month, and can participate in the “Hong Kong Wine and Dine Festival”, which is being organised from October 28 to October 31, you would get a free wine pass. However, if you travel first or business class (card), you would receive 5 wine tokens in addition to it.
Travel: If you are in a holiday mood this season, make sure you book tickets online. Several credit card issuers like HSBC and SBI have tied up with online travel portals like makemytrip.com, ezeego1.com for cash back offers of up to 30% on booking through them.
Under IRCTC and SBI card tie-up, you are eligible for refund up to 17% on all hotel and railway bookings, if the transaction is worth Rs 7,500 and above. Also, you can earn discounted tickets this season by using your card. Under the ‘Bonus Pe Flying Bonus’ offer by SBI cards, you can earn one discounted Kingfisher airline ticket if you swipe your card for purchase worth between Rs 60,000-one lakh.
Any purchase above Rs 1 lakh can get you two such tickets. “These offers are for both new as well as existing cardholders, provided the new cardholders have enrolled within the offer period,” says Abhay Kumar Singh, CEO, SBI Card. Similarly, you can save up to 10% on the base fare of your GoAir ticket by using your HSBC credit or debit card.
For your city travel you can make use of your Indian Oil Citibank credit card wherein you will get free fuel worth Rs 300 (maximum Rs 600) on every spend of Rs 30,000 on the card. The free fuel would be credited as Turbo Points to your card and will reflect in your credit card statement. The scheme, which has been running under its special offer is valid till the end of November.