axis Bank,
And DBS India Citi-exiting businesses in India are also in contention. Although the US lender is seeking a valuation of more than $2 billion, bids may be more circumspect after Citi lost significant market share in its retail and credit card books, said one of the executives cited above.
HDFC Bank and Kotak Mahindra Bank, two of India’s top three most valuable private sector lenders, are considered to be at the forefront of winning the business that generates revenue of around $1 billion.
An official involved said, “While Citi’s retail franchise remains excellent, the book has shrunk. It has lost significant market share and due to the exit plan, it is focused on growing the existing book and adding quality customers. Not being able to concentrate.” bidding process.
“Nevertheless, Citi has received several bids from domestic banks. At the same time, it is also expected to receive bids from global suitors, who are looking to take consumer assets across several markets that are exiting the bank,” the official said.
Citi India said it has received good interest from the bidders.
A Citi India spokesperson said in response to an email to ET’s queries, “We are focusing on consumer franchise sales with a focus on better results for our people, our clients and our shareholders. “Talks are on with potential buyers in these markets, including India, with strong interest from a wide range of bidders.”
HDFC Bank, Kotak Mahindra Bank, DBS India, axis Bank And IndusInd Bank did not respond to ET’s mailed query.
Citibank, under its first female CEO, Jane Fraser, decided to exit the retail business in 13 markets to conserve capital and focus on high-yielding revenue streams. City management has indicated that while the exit process is currently underway and that it will try to complete the exit in a time bound manner, the retreat will be nothing akin to the so-called fire sale.
Citi’s consumer portfolio contributes about a third of India’s profits to business, while the overall Indian business contributes 1.5% of the profits to the lender’s global book.
The Indian retail basket includes credit cards, deposit accounts, wealth management and a mortgage portfolio. Overall, Citibank’s Indian arm of advances and deposits had a market share of 0.6% and 1.1%, respectively. In India, Citibank has over 2.5 million retail customers, 1.2 million bank accounts and about 2.6 million credit cards. It has lost over 100,000 customers since its exit was announced.
perfect combination
Although Citi is India’s sixth largest card issuer, it has lost market share on card spend – from 20% a decade ago to 4% now. However, it has consistently spent 15-25% higher per card than the industry average, Macquarie’s analysis showed. The combination of premium cards and corporate salary account cards in the portfolio makes Citi Business attractive to bidders. “We have done due diligence on the book. This is a good franchise for banks that do not have an existing credit card or wealth book and it only makes sense at a good valuation. We will have to see how aggressively we bid Put it on,” he said. A top official in a bank who is likely to submit his bid.