Two banks in India are reported to be duelling for the credit card business of Barclays India Pvt Ltd, the Indian-subsidiary of the British bank that has been ailing in India.
According to local news reports in India, Mumbai-based Standard Chartered Bank India Pvt Ltd and State Bank of India Ltd have expressed interest in buying Barclays' card business.
The banks declined to comment on the reports.
Barclays said in April that it planned to review its credit card business in India after deciding to focus instead on secured retail assets (
That news followed IndusInd Ltd.’s announcement of plans to take over the credit card business of Deutsche Bank India Pvt. Ltd. in a deal valued at 2.24 billion rupees (US$50.3 million or 34.8 million euros).
Observers at the time said they expected certain banks that missed out on Deutsche to pursue the Barclays card portfolio, led by Mumbai-based Axis Bank Ltd, which was among the main banks in contention for Deutsche’s card business in India.
But by the end of May, Barclays was unable to find a buyer for its credit card business, despite offering a significant discount to potential buyers, an official with one of the banks Barclays approached told PaymentsSource (
At that time, the official said, potentiall buyers appeared to be playing a waiting game because Barclays has significant bad card loans on its books, and it eventually could be forced to reduce its portfolio price even further.
Barclays’ net non-performing loans rose to 5.15% of receivables at the end of March compared with 4.59% a year earlier, according to the Reserve Bank of India’s public profile of banks.
The bank also cut its Indian card unit’s staff by 29%, to 1,083 at the end of 2011 compared with 1,534 in 2010, the central bank said.
Barclays currently has about 200,000 cardholders in India, a tiny piece of the 17.7 million credit cards in circulation in the country.
Final bids for the Barclays credit card business in India are expected in early October, according to news reports.
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