Mumbai: Leading British lender Barclays Bank has said the restructuring at its India unit is a part of the efforts to put more focus on the local market, which it considers "very important in its global strategy".

The comment comes on the heels of bad press that the lender was getting in India in the recent weeks, as the restructuring process involves loss of jobs.
    
"We are very serious about our India operations and the ongoing restructuring of certain portfolios only shows our seriousness in sharpening our focus on this market further,"
Barclays Capital Asia Managing Director (Investment Banking) Helge Weiner-Trapness recently told the agency here.

The recast involves winding up of its SME division as cross-selling of investment banking and normal banking has not developed the way it was expected. Post-wind-up, the bank aims to sharpen its focus on lending to large corporates and MNCs, said a source familiar with the development.
    
Other foreign banks in India, such as Standard Chartered, Bank of America Merrill Lynch and Citi, have separate investment and corporate banking divisions in the country.
    
The move to shut down SME division also stems from the fact that Barclays has been facing competition from homegrown lenders such as HDFC Bank, Kotak Mahindra Bank and YES Bank in this segment.
    
Despite mounting losses, the recast does not cover retail business, which Barclays still considers as a priority. "Our retail strategy remains unchanged and we are committed to building the retail business franchise in this market," a source said.
  
 In 2010, the proportion of retail banking NPAs to the total loan-book of Barclays stood at close to 10 per cent.
    
According to an RBI report, Barclays' NPAs at Rs 1,422 crore were the second-highest among foreign banks in the country; just behind Rs 1,683 crore of HSBC. Barclays' non-priority sectors like credit cards and personal loans accounted for 91.3 per cent, or Rs 1,298 crore, of bad loans.
    
It is normal among foreign banks to keep re-drawing their businesses. For instance, HSBC, which a few years ago was focusing on SMEs, scaled it down.

It wound up its retail banking subsidiary Pragati Finance a couple of years ago. Due to the RBI cap on opening new branches, even the retail focus of the largest MNC lender StanChart did not grow the way it wanted.
   
 This April, the domestic arm of the largest German-lender Deutsche Bank sold its credit card business to the Hindujas-run IndusInd Bank for around Rs 300 crore after it failed to make money from this business.

According to sources, Barclays is also in talks for a possible sale of its SME business. Loans which come under the Rs 200-2,000 crore bracket are qualified under small and medium size loan segment.
    
It is learnt that Barclays is trying to sell its credit card business too, as losses are mounting. The second part of the recast process is the revamp of its corporate finance business by merging the client relations team of Barclays Corporate Banking and Barclays Capital, and the resultant retrenchment of some 25 people.
   
 A Barclay’s spokesperson had told the agency in mid-July that "we have combined the client relationship teams in Barclays Corporate Banking and Barclays Capital. As a result, the client servicing team will now report to the investment banking head here.

    
"The move recognises the close alignment between these two businesses as they focus on serving the needs of the country's largest companies, MNCs and financial institutions.
Due to this, there will be a small reduction in the number of corporate coverage and product bankers at Barclays," the spokesperson said.
    
But a Barclay’s source said this would impact one-third of the coverage or client relations team in the corporate banking business, which works out to be around 25 mid-level executives.
    
Barclays Corporate includes its NBFC launched in March, 2008 called Barclays Finance. It currently has over 50 distribution points. The bank has 2,000 commercial clients, including large corporates, small and medium enterprises and companies looking to grow overseas.

   
 As of March 2010, the bank's outstanding loans were at Rs 7,600 crore against Rs 10,600 crore in the previous year. In FY10, Barclays had loss of Rs 550 crore, against a net profit of Rs 30 crore in FY09. As of March 2011, gross NPAs were at Rs 781 crore, which is a major drop from FY10 when its bad loans stood at Rs 1,400 crore.
    
Though parent Barclays is the second-largest lender in Britain with 1.49 trillion pounds in assets, Barclays India has only nine branches and 40 ATMs. Its total income for FY10 was Rs 1,808 crore; and it employs around 5,000 people.
    
Recently, the country's oldest foreign bank HSBC, which had posted a whopping 82 per cent spike in annual profit for 2010, too said it was revamping its operations, which would impact some 100-odd jobs at its loan recovery division. But a Barclay’s source said this would impact one-third of the coverage or client relations team in the corporate banking business, which works out to be around 25 mid-level executives.
    
Barclays Corporate includes its NBFC launched in March 2008 called Barclays Finance. It currently has over 50 distribution points. The bank has 2,000 commercial clients including large corporates, small and medium enterprises and companies looking to grow overseas.
    
As of March'10, the bank's outstanding loans were at Rs 7,600 crore against Rs 10,600 crore in the previous year.
    
In FY10, Barclays had loss of Rs 550 crore, against a net profit of Rs 30 crore in FY09. As of March'11, gross NPAs were at Rs 781 crore, which is a major drop from FY10 when its bad loans stood at Rs 1,400 crore.

Though parent Barclays is the second-largest lender in Britain with 1.49 trillion pounds in assets, Barclays India has only nine branches and 40 ATMs. Its total income for FY10 was Rs 1,808 crore; and it employs around 5,000 people. Recently, the country's oldest foreign bank HSBC, which had posted a whopping 82 percent spike in annual profit for 2010, too said it was revamping its operations, which would impact some 100-odd jobs at its loan recovery division.