Mumbai: HSBC will step up mortgage lending in India after keeping to the sidelines for the past 18 months, and plans a cautious resumption of growth in consumer finance after unsecured loans soured across the industry, the global bank's new country chief executive said.
Indian home buyers are returning to the market after more than a year of subdued activity, lured by a 25-40 percent drop in prices. Demand has also been spurred by smaller projects that have raised affordability.
"We're keen to not only get back to our previous levels but expand that quite strongly," said Stuart Davis, who was appointed to his new position in April after heading the London-based lender's Australian operations.
"The property market is more balanced, the supply and demand equation and the affordability is much more balanced than what it was two years ago, when on the back of the boom conditions prices of property went ahead of themselves," Davis said.
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HSBC's India business saw a 46 percent drop in net profit for the first half of 2009 to USD 201 million, as losses on retail lending more than doubled to USD 124 million. HSBC discontinued consumer finance loan origination in India towards the end of last year.
"Certainly, like everyone else we've felt a bit of pain on the unsecured retail asset side, and we're just working our way through that," Davis said.
"We think we're over the hump and so we will be at some time looking to cautiously grow our portfolio again," he said.
Bureau Report
First Published: Friday, August 14, 2009, 15:36