Citibank, which recently announced that it will be exiting from 13 international consumer banking markets, including India and China as part of its global strategy.
It has begun looking for a buyer for its consumer business in India to be in talks with several foreign leaders, including DBS Bank, for its India business.
“We will invest more in this segment,” the official added. Citibank announced on April 15 that it will shutter retail banking operations in 13 countries including India and China.
The company has said that it will exit consumer/retail operations in 13 countries across Asia and Europe.
The 13 nations are Australia, Bahrain, China, India, Indonesia, Korea, Malaysia, the Philippines, Poland, Russia, Taiwan, Thailand, and Vietnam.
Citibank Looking For Buyers
“Talks with DBS Bank are at an advanced stage and they are keen to take up the entire consumer banking operation,” said a person familiar with the development.
Citi declined to comment on an email query sent by BusinessLine on the issue.
“At this juncture, the details are still unclear. However, we have always been open to exploring sensible bolt-on opportunities in markets where we have a consumer banking franchise (India, Indonesia, China and Taiwan) and where we can overlay our digital capabilities to serve our customers better,” a DBS spokesperson said in response to an email query by BusinessLine.
Many banks are interested in Citi’s credit card business in India, which had 26.4 lakh customers as of February 2020.
DBS Bank India Limited
DBS Bank India Limited was the first large foreign bank to establish a wholly-owned, locally incorporated subsidiary in India, and as it has been eager to expand its operations in the country.
Lakshmi Vilas Bank was merged with DBS Bank India in November, giving it access to a wide customer base.
Analysts estimate that any transaction would take at least six months to complete. Citi’s Indian consumer market, according to JM Financial, has a sizable presence, with retail loans totalling around 3,200 crores.
“It needs to be seen whether all these businesses will be sold together or piecemeal. Also, payment consideration, in cash vs stock, will be a critical determinant to decide the eventual buyer. Since Citi functions in India through a “branch route” versus a wholly-owned subsidiary (like DBS Bank), the transaction will mostly be an asset sale. In our view, the process could take 6-12 months until a final winner emerges,” it said.
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