Page 34 - The Indian EYE 041621

Business EYE
who is going to buy
citibank in india?
Several mid-sized banks interested in buying operations that serve 2.9 million retail customers
with 1.2 million bank accounts; It has 2.2 million credit card accounts
Our Bureau
Mumbai
itibank has announced
its intention to exit
Cthe consumer banking
business in India, first started
back in 1985. The bank will
now look for a buyer for its
consumer book, including the
credit cards business as part of
its exit strategy.
while announcing its
first-quarter earnings for
2021, citigroup’s glob-
al ceo Jane Fraser an-
nounced the bank’s exit
from consumer banking
in 13 countries including Hcent rise in its consol- bank’s gross non-performing
india.
“While the other 13 markets
have excellent businesses, we
don’t have the scale we need to
compete. We believe our capi-
tal; investment dollars and other
resources are better deployed
against higher returning oppor-
tunities in wealth management
and our institutional businesses
in Asia. We will continue to up-
date you on strategic decisions as
we make them while we work to
increase the returns we deliver to
our shareholders,” Fraser said.
A spokesperson for Citibank
India insisted the decision to
exit was not linked to the bank’s
financial health at all. “It is not
due to stress, it is due to our
global strategy,” said this person.
Citibank serves 2.9 million
retail customers with 1.2 million
bank accounts. It has 2.2 mil-
APRIL 16, 2021 | The Indian Eye 34
lion credit card accounts with
around 6 per cent market share
of retail credit card spends in
the country. Citibank India has
35 branches and as of the year
ended March 2020, the bank
had advances aggregating to Rs
66,507 crore and deposits worth
Rs 157,869 crore.
Many feel the reason for
selling the consumer banking
business is that the profits of
the consumer banking business
have been under stress and a lot
more capital was needed to run
that business.
Bankers say several mid-
The construction activities have given a boost to steel and cement industries sized banks in India would be
HdFc Bank reports jump in profits interested in buying Citi’s con-
sumer banking business as it
would provide them with scale.
DFC Bank on Satur- ceding year. Industry insiders, however,
day reported a 15.8 per
On the asset front, the
point towards various models.
While it could be tough to find
idated net profit at Rs 8,434 assets as of March 31, 2021 a big buyer who can acquire the
crore for the quarter ended stood at 1.32 per cent of the license in current times, the new
March 2021. The private sec- gross advances, slightly up from buyer will also have to clear the
tor lender had registered a net 1.26 per cent in the year-ago fit and proper criteria of the Re-
profit of Rs 7,280 crore in the period. In absolute value, the
corresponding quarter a year gross advances were worth Rs serve Bank of India. The more
ago. “Consolidated advances 15,086 crore at the end of FY21, feasible option could be ‘Sum of
grew by 13.6 per cent from Rs down from Rs 12,649.97 crore. The Parts’ valuation approach
where business segments would
10,43,671 crore as on March Net NPAs were 0.40 per cent be valued independently and
31, 2020 to Rs 11,85,284 crore (Rs 4,554.82 crore) as against taken up by interested parties.
as on March 31, 2021,” HDFC 0.36 per cent (Rs 3,542.36.
Bank said in a regulatory filing. Provisions for bad loans and So, if some bank is interested
The consolidated net profit contingencies were raised to Rs in its mortgage business, it can
for the year ended March 2021 4,693.70 crore for the reported go for that and someone who is
interested in the card business,
was Rs 31,833 crore, up 16.8 quarter from Rs 3,784.49 crore can go for it.
per cent over the previous fiscal parked aside in the year-ago The bank has said as of now
year. Total income (consolidat- period. there will be no change in the
ed) increased to Rs 40,909.49
“The bank also continues to
crore for the January-March hold provisions as on March 31, bank’s operations and they will
quarter of FY 2020-21 from Rs 2021 against the potential im- continue to serve their clients
38,287.17 crore in the year-ago pact of Covid-19 based on the with the same care and dedica-
tion that they do today. Also,
period. The full-year income information available at this the bank has clearly said that it
(consolidated) in 2020-21 rose point in time and the same are is not closing down the consum-
to Rs 1,55,885.28 crore from in excess of the RBI prescribed er business in India and its plans
Rs 1,47,068.28 crore in the pre- norms,” HDFC Bank said.
is to sell off the business.
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