Foreign lender Barclays Bank has seen a significant rise in impairments in the unsecured lending and cards portfolio in India for the quarter ended March 31 and plans to slow its expansion in the emerging markets.
While net profit across the group rose 12 per cent to £826 million for the three months ended March 31, impairment charges were at £2.31 billion, up 79 per cent from the year-ago figure.
The bank’s global retail and commercial banking (GRCB) division saw a 45 per cent dip in pre-tax profits to £586 million from £1.06 billion in the corresponding period last year.
Without disclosing figures, the bank said it incurred a loss on its GRCB Emerging Markets division, mainly on account of expansion costs and “growth in impairments in unsecured consumer lending and cards, particularly in India”. When asked to quantify the impairments in credit cards and unsecured loans, a spokesperson for Barclays bank said, “As this was only our interim management statement, we would not like to go into details beyond what has been shared already... Our credit card base is moving in sync with overall market sentiment and current industry trends.”
Meanwhile, Barclays said that Samir Bhatia had resigned from his post as managing director, GRCB India and Indian Ocean effective immediately. “In the interim period, Ram Gopal, COO for GRCB India will act as the Interim MD, reporting to Mark Jones, Managing Director-Asia, GRCB Emerging Markets,” the spokesperson added.
Since it began commercial banking operations in India in November 2006 and retail banking in May 2007, the bank has grown at an aggressive pace, adding 721,000 and 121 distribution points in 2008. However, the lender said its expansion into emerging markets would be “significantly lower” this year and the focus would be on maximising returns.
Barclays spokesperson in India said, “Barclays Bank remains highly committed to India and believes India will play an extremely important role in building and diversifying its emerging markets business.”
The spokesperson also said that Samir Bhatia had resigned from his post as managing director, GRCB India and Indian Ocean effective immediately.
“In the interim period, Ram Gopal, chief operating officer for GRCB India will act as the Interim MD, reporting to Mark Jones, Managing Director-Asia, GRCB Emerging Markets,” the spokesperson added.
