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% 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 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 bank's group profit.

In the first half of 2011, London-based HSBC posted a loss of USD 4 million in its India retail banking and wealth management business, narrowing from a loss of USD 49 million in the year ago period.

Its overall first-half pre-tax profit in India rose 32.6% to USD 451 million.