HSBC to resume mortgage lending
HSBC to resume mortgage lending
Mumbai: After keeping to the sidelines for the past 18 months, Hongkong and Shanghai Banking Corp. Ltd (HSBC) will step up mortgage lending in India .
The bank plans a cautious resumption of growth in consumer finance after unsecured loans soured across the industry, said Stuart Davis, the global bank’s country chief executive.
Davis, who was appointed to his new position in April, after heading the London-based lender’s Australian operations, said the bank was seeing signs of increased loan demand in India, although the basis for that demand remains unclear.
Of HSBC’s $5.2 billion (Rs25,116 crore) India loan portfolio at the end of June, $997 million was in residential property, a 27% drop from a year earlier.
Overall lending in the country was down 31% from a year earlier as HSBC shrank its global loan book.
“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.
HSBC’s India business saw a 46% drop in net profit for the first half of 2009 to $201 million, as losses on retail lending more than doubled to $124 million.
HSBC discontinued consumer finance loan origination in India towards the end of last year.
Davis assured HSBC would build consumer lending through its branch network, including its InvestDirect brokerage, and would only use direct sales agents sparingly if at all.
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