Barclays Bank is likely to review its credit card business in India, following its decision to focus on secured retail assets.
According to sources familiar with the developments, Barclays may review several options, including the sale of its credit card operations in India. “The credit card business is one, which has to be reviewed very closely because it is a business where scale counts a lot,” said a source.
Sources also pointed out the bank was yet to invite bids for its credit card business, but said sale could be an option if buyers offered a high price.
After the economic slowdown, a number of foreign banks, Barclays being one, shifted their focus back on secured retail assets in India.
Barclays declined to comment on this issue. “We do not comment on market speculations," Karan Bhagat, managing director and country head, Barclays Corporate, told Business Standard.
Credit card operations are part of Barclays’ retail business, which along with corporate banking, is managed by Barclays Corporate. The book value of the cards business was not available immediately.
Earlier this month Deutsche Bank sold its credit card business to private lender IndusInd Bank. While the banks did not provide the details of the deal size, it is estimated at above Rs 224 crore. Deutsche Bank said it was selling its cards business because it failed to increase the scale of operations. The acquisition, on the other hand, helped IndusInd Bank enter the credit card business.
According to analysts, domestic private banks looking to set up credit card business may be interested in Barclays’ card portfolio. "Several private banks were interested in buying Deutsche Bank’s credit card business. Some of them may be interested in Barclays as well. It makes sense, since they would also get the employees and the platform of the cards business," said an analyst with a domestic brokerage. “The key issue, however, would be the price at which Barclays would be willing to sell its cards business,” he said.