HongKong Shanghai Banking Corp is restructuring the consumer banking and wealth management business of its India operations, a top executive told ET. The UK-based bank is also changing its incentive practice for relationship managers to bring in more accountability and plans to reduce its basket of mutual funds from 170 to below 100.
We have now tightened our credit standards and are using the credit bureau extensively," said Gannesh Bharadwaj, head of retail banking and wealth management at HSBC India. Unsecured loans, including personal loans and credit cards, are now being marketed to bank customers and corporate salaried customers.
"The bank is now focusing on customers with deposits of over Rs 3 lakh, rather than going for mass customers, a move that did not go well with us in 2008," Bharadwaj said.
HSBC, like most foreign banks, has been cleaning its books since 2008, when its consumer banking business was hit by losses on account of rising bad loans. Prior to the economic crisis in 2008, the bank was marketing its loans to non-bank customers and relying heavily on third-party agents. A weak credit bureau also added to the bank's woes.
The bank's non-performing loans, which stood at 2.31% OF GROSS LOANS in March 2010, has dipped to about 0.62% In March 2012. The NPAs in the personal loans business has dipped to 5.74% at the end of March 2011, compared with 18.36% in March 2010. The retail banking business of HSBC India posted a profit of Rs 383.63 crore at the end of March 2012, compared with Rs 516.6-crore loss in March 2010.
The bank has set up a customer value management cell, which will house all products including mortgage, personal loans, credit cards and wealth management. This is different from the structure followed by most foreign banks where every loan product is housed in a separate vertical.
"Globally, the retail banking business is being revamped. It is no more a product-driven approach. The 500 relationship managers will provide investment advice and also sell home and personal loans, credit cards and deposits," Bharadwaj said. The bank is now ramping up its credit card and home loan business. The bank after shrinking its credit card book is now back in the market. It has 5 lakh credit card customers compared to about 18 lakh customers two to three years ago. The bank is also in the process of acquiring Royal Bank of Scotland's retail assets in India
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