UPDATE 1-Citi to boost India card, personal loan businesses

Mon Mar 5, 2012 9:31am EST

* Sees 30 pct growth in personal loans over 2-3 years

* Says "comfortable" with asset quality of all product lines

By Sumeet Chatterjee

MUMBAI, March 5 (Reuters) - Citigroup Inc expects to increase the number credit card customers it has in India by more than 20 percent a year over the next two to three years as it looks to boost its unsecured business portfolio in the country, a senior Citi executive said.

The bank, which is building up its retail business in India, also expects to increase its personal loan portfolio by 30 percent a year over that period, Anand Selva, head of consumer banking for Citi in India, told Reuters on Monday.

Foreign banks in India including Citi slashed unsecured lending after personal loans and credit card debt turned bad following the global financial crisis in 2008.

The banks have boosted unsecured lending over the past year to tap into a market where only about 17 million people out of a population of 1.2 billion use credit cards.

In China, more than 200 million people have credit cards, industry officials say. Many Indian consumers are yet to warm up to the idea of credit cards, preferring to use debit cards instead.

Citi, one of the top three foreign commercial banks in India along with Standard Chartered and HSBC, has about 2.2 million credit card customers in India.

"We are very focused on building up our cards business," Selva, who ran Citi's consumer banking unit in China from 2008 before taking up the new role in India in July 2011, said after launching a new retail banking service in Mumbai.

"I was quite surprised when I saw that there were only 17 million cards in India for a large population. That is very small. I do believe there is a huge opportunity in the country."

Foreign banks lack the branch networks of local lenders like ICICI Bank and HDFC Bank, India's biggest card issuers, but tend to attract the most well-heeled customers in a country where incomes are rising fast.

Selva said the bank was looking for credit card and personal loan customers outside its pool of commercial banking clients in the country, but it had beefed up due diligence to restrict loans turning sour.

Citi, the third largest U.S. bank by assets, operates across businesses including corporate, consumer and investment banking, and wealth management in India.

"We are very comfortable with the asset quality in all our product lines, mainly cards, mortgage and personal loans," he said, adding Citi's mortgage business in India should continue to grow at 15-20 percent a year for the next couple of years.

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