Britain's Barclays Plc (BARC.L) will abandon retail lending in India to focus on wealth management and corporate and investment banking, a move that a source said would result in the loss of about 150 jobs.
Barclays, which is fighting to revive profitability, merged its Indian commercial and investment banking units four months ago, cutting about 50 jobs, and is also selling its credit card business in the country.
The latest job cuts would represent about 17 per cent of the bank's remaining 850 employees in India.
The source, who has direct knowledge of the matter, said on Wednesday that Barclays planned to sell its retail loan book of more than $580 million in the next six months to one year.
"The quality of the retail loan book is very good and the bank should not have a problem in finding a buyer," said the source, who declined to be named as the information is not public.
"Barclays realises that it does not have the competitive advantage and scale to build up a strong retail business in India," the source said. "The sale of the credit card business and the retail loan book will help it focus on segments that are profitable."
Standard Chartered (STAN.L) will buy 170,000 credit card accounts from Barclays, which has about 300,000 card customers in India, at a discount to book value, sources told Reuters on Tuesday.
Standard Chartered and SBI Card, a joint venture of State Bank of India (SBI.NS) and GE Capital (GE.N), had been competing to buy Barclays' India credit cards business, sources told Reuters in September.
Barclays said existing retail loans would continue to be handled as normal and that it would maintain its deposit business.
Foreign banks in India face stiff competition from local rivals such as top lender State Bank of India and No.2 ICICI Bank (ICBK.NS), and have managed to capture only a small share of the country's retail banking business.
India's central bank also curbs the number of branches that foreign lenders can open and limits their holdings in domestic players to just 5 per cent. Standard Chartered, Citigroup (C.N) and HSBC (HSBA.L) are the leading foreign banks in India.
Under its World Trade Organization commitments, India is obliged to issue 12 branch licenses to foreign banks each year. Foreign banks say this is not adequate to make a meaningful impact in a country of more than 1.2 billion people.
Barclays has nine branches in India, and the source said the bank would retain the branches to continue with deposit business and service existing loans. The bank will focus on high-end clients for deposit services, the source said.
Barclays, which reported a 5 per cent rise in underlying quarterly profit in October, has cut about 3,500 jobs globally this year, more than the 3,000 that had been earmarked for the year in August.