Standard Chartered Bank appears to lead the race to acquire Barclays Bank's credit card business in India, six months after the British lender decided to sell it, three people familiar with the development said.
A deal is likely to be signed in the next couple of weeks. Apart from Standard Chartered Bank, SBI Card, a joint venture between State Bank of India and GE Capital, is the only other bidder for Barclays' card business in India.
"As of now, Standard Chartered leads the race. But one cannot be certain whether it would finally buy this portfolio. There is many a slip between the cup and the lip," said a source requesting anonymity, owing to the sensitivity of the information.
Another source confirmed the development, saying, "The possibility of the business going to Standard Chartered is 90 per cent."
The size of the deal is likely to stand at about Rs 200 crore (Rs 2 billion), including "a small premium," said a third person privy to the development.
The sale would include only the performing portfolio of Barclays' credit card business, which comprises around 240,000 cards.
Initially, when Barclays announced its plan to exit its cards business, five banks and financial institutions, including the country's third-largest
Sources said the other three firms opted out of the deal, since they did not find the valuation attractive.
Standard Chartered Bank and SBI Card declined to comment.
"We are reviewing the options for cards, a business which requires scale. We are looking at various options," said Barclays' spokesperson in India, declining to give the details.
Foreign and private banks in India have once again turned aggressive in expanding their unsecured assets, especially the credit cards business.
Early this year, IndusInd Bank had acquired Deutsche Bank's Rs 224-crore credit cards business in India, while HDFC Bank had announced the launch of premium segment cards, including 'Infinia', which it positioned against the American Express card.
The number of credit cards in India, however, continues to decline, even though spends on these cards have been rising.
The number of outstanding credit cards in July stood at 17.65 million, compared with 17.66 million in June. The total credit card expenditure in July stood at Rs 7,471 crore (Rs 74.71 billion), higher than Rs 7,191 crore (Rs 71.91 billion) in June.
