India

Citibank announces exit from consumer business in India

India: On April 16, Citibank announced its exit plans from the consumer franchises in 13 markets across Asia, Europe and India. This hereby means that the oldest foreign bank establishment will be making its exit on the consumer financing operations in the near future.Other markets include Australia, Bahrain, China, Indonesia, Korea, Malaysia, the Philippines, Poland, Russia, Taiwan, Thailand, and Vietnam.

As per the sources, the reason behind this move is the lack of scale in some markets where either because of regulations or otherwise, the bank was not able to build scale in consumer banking.

Indian banking regulators offered a breather to such foreign banks for national treatment in setting up branches or acquisitions (M&As) provided that they switch from the current branch model to a wholly-owned subsidiary model.

As a matter of fact, only Singapore-based DBS took the subsidiary route and was also remunerated when RBI approved its acquisition of South-based Laxmi Vilas Bank.

In the early 2000s, Citi reached great heights in India through its NBFC Citifinancials and also the bank’s credit card business, but the post-2008 financial meltdown set a heavy impact on the Indian entity.

“India is a strategic talent hub for Citi. We will continue to tap into the rich talent pool available here to continue to grow our five Citi Solution Centers which support our global footprint. There is no immediate change to our operations and no immediate impact to our colleagues as a result of this announcement. In the interim, we will continue to serve our clients with the same care, empathy, and dedication that we do today,” Citi India CEO Ashu Khullar said.

Citigroup will need to look for a buyer for the retail banking operations in India.

Khullar added, “Citigroup will continue to deliver innovative digital solutions, backed by its global network, and devote its resources to large and mid-sized Indian corporates and multinationals, financial institutions, start-ups in the new age sectors, amongst others.”

The revenue recorded a 7% fall on low-interest rates and a 10% decline in loans, majorly due to lower consumer credit loan balances. The net income tripled to $7.94 billion, or $3.62 per share, from $2.54 billion, or $1.06 per share, a year earlier.

According to Refinitiv IBES data, analysts, on an average, had expected a profit of $2.60 per share.The bank’s bottom line was buoyed up by its decision to draw down $3.85 billion in reserves that it had built up for any expected loan losses from the pandemic. A year earlier it had added $4.88 billion to its loss reserves.

Andrew s

Andrew has been in the online publishing industry. After receiving his degree in professional journalism from the Indian Institute of Journalism and New Media, he contributed to multiple websites as a freelance writer and feature editor. Mostly, Andrew tackles controversies and theories that lead to a specific conclusion that either debunk or justify a particular claim. Further, Andrew participates in social developments that aim to simplify every individual's way of life and fight for peace. He is the new Editor-in-Chief of Pressroom Today.

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