(Updates with Indian economic growth third paragraph.)
Dec. 8 (Bloomberg) -- Barclays Plc plans to stop offering new retail loans in India to focus on wealth management and corporate and investment banking as the nation’s economic growth shows signs of cooling.
The bank aims to “consolidate and build a sustained profitable Indian business” based on its strengths, spokesman Subhayu Mishra said in an e-mailed response to questions yesterday. Existing loans will continue, and the lender will maintain its deposits business, he said.
Barclays, the U.K.’s second-largest bank by assets, will eliminate 200 of its 1,200 retail banking positions in India as it winds down consumer lending operations, a person with knowledge of the matter said, declining to be identified as the information is confidential. Cuts in the country come amid the slowest quarterly growth since 2009 and headcount reductions at banks worldwide stemming from Europe’s debt crisis.
The London-based bank will cut the number of branches at its Indian finance unit to less than 10 from about 27 now, the person said. That’s down from a peak of about 79 outlets in 2010. Barclays is also in the process of selling about 32 billion rupees ($622 million) of retail loans in India, the person said.
Standard Chartered Plc has bought about 1.75 billion rupees of credit-card loans from Barclays in India, Arijit De, a Standard Chartered spokesman in India, said yesterday.
Barclays’s plan to wind down its retail banking operations in India and sell some of the assets was reported yesterday by the Economic Times newspaper.
Global Job Cuts
Barclays is among global banks cutting staff as Europe’s debt crisis and increased regulation threatens to erode earnings. The bank said Nov. 1 that it had already eliminated 3,500 jobs this year, ahead of its August prediction that it would remove 3,000 posts. Citigroup, the third-biggest U.S. bank by assets, said yesterday it will cut about 4,500 jobs in coming quarters to reduce costs amid slumping revenue and “unprecedented” market conditions.
Barclays is halting new retail loan operations in an economy that expanded at the slowest pace in almost two years, and where the rupee has fallen almost 14 percent this year as investors sold emerging-market assets on concern Europe’s debt crisis will trigger a global recession.
India’s $1.7 trillion economy expanded last quarter at the slowest pace in almost two years after the central bank raised interest rates to tame inflation. The nation has also signaled it’s prepared to act against excessive declines in the rupee, as Asia’s worst performing currency this year threatens to exacerbate the fastest inflation among so-called BRIC nations and hurt growth.
The recent sharp depreciation isn’t a sign of “helplessness in dealing with the kind of global turbulence we are seeing,” central bank Deputy Governor Subir Gokarn said in Mumbai on Dec. 3. “We do have the instruments to do this in the form of strategic capital controls, which can be used to enhance the supply of foreign exchange.”
--With assistance from Jacob Greber in Sydney. Editors: Chitra Somayaji, Edward Evans
To contact the reporter on this story: George Smith Alexander in Mumbai at firstname.lastname@example.org
To contact the editor responsible for this story: Chitra Somayaji at email@example.com