ABN Amro Buying Auto Loans

According to ABN Amro Bank India’s Executive Vice President, Romesh Sobti, they were scaling down on auto loans as personal loans started to grow. Because of this, the market began to change and they were seemingly at the right place at the right time.

The company is now expanding its portfolio to include unsecured retail business such as credit card and personal loan debt. They already handle secured debts such as auto loans and mortgages. The unsecured portion of their debt is now 70% of their portfolio.

They say that retail brings in about 65% of their revenues, with the rest coming from corporate banking. The return on secured assets is around 1% while unsecured is between 3.5 and 5%.

The launching of their own credit card, ABN Amro Credit, should prove to be fruitful for them as well. It promises their customers 2% cash back on all spending, which many people will embrace. Because it is unsecured, many have asked if they are making the right choice.

Officials for the bank say that there will always be defaults on unsecured loans, and that they have to decide where to allow their risks. They know that if they allow them on the unsecured side that they will end up with more money than if they had stuck with just auto loans and mortgages.

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