Citi has been in India for many years and was among the many first to introduce Indians to bank cards in 1987.
Banks together with DBS Group, Mitsubishi UFJ Financial Group (MUFG), OCBC and Standard Chartered are set to bid for elements of Citigroup’s client enterprise in Asia, folks with direct information of the matter mentioned.
The sale course of will begin inside a few weeks, they added, declining to be named as they weren’t authorised to talk to media.
The transfer comes after Citi mentioned it might exit from its client franchises in 13 markets, 10 of that are in Asia, because it refocuses on its extra profitable institutional and wealth administration companies in these markets.
Potential bids from the regional banks and StanChart, which makes most of its revenue in Asia, underscores their rising urge for food for companies like bank cards and mortgages in a push to lock in long-term earnings progress.
The companies Citi is exiting had $82 billion in property and had been allotted $7 billion in tangible widespread fairness final yr. Citi has plans to reposition its Asian client banking enterprise from its “wealth centres” of Hong Kong and Singapore.
As Citi just isn’t giving up its banking licences in a lot of the markets it’s exiting, the sale of the patron banking portfolios and branches will solely attraction to lenders with current presence in these nations, the folks mentioned.
“Asia is critical to our firm’s strategy, and we will allocate resources to drive profitable growth,” a Citi spokesman in Hong Kong mentioned, declining to touch upon the sale course of.
Representatives at Japanese lender MUFG and StanChart, and Sumitomo Mitsui Financial Group, which the sources mentioned was one other potential bidder, declined to remark.
“DBS has always been open to exploring sensible bolt-on opportunities in markets where we have a consumer banking franchise (China, India, Indonesia and Taiwan) and where we can overlay our digital capabilities,” Southeast Asia’s greatest lender mentioned in an announcement.
In 2016, DBS purchased ANZ’s wealth administration and retail companies in 5 Asian markets for about $80 million.
Citi’s sprawling India client enterprise, comprising retail deposits, mortgages and bank cards, and its Taiwan enterprise could be among the many most precious elements of its Asian client portfolio, the sources mentioned.
Citi’s client banking enterprise within the 13 markets accounted for $4.2 billion of the financial institution’s $74.3 billion income in 2020. All the markets it’s exiting made a mixed lack of $40 million within the client banking enterprise in the identical yr.
India ‘Jewel In The Crown’
DBS, the one huge international financial institution with a totally owned Indian subsidiary, is eyeing Citi’s India enterprise, which can be set to draw StanChart and native lenders Kotak Mahindra Bank and Axis Bank, the sources mentioned.
SBI Cards and Payment Services Ltd, a unit of State Bank of India, can be weighing a bid for Citi’s bank card portfolio in India, two of the sources mentioned.
Citi’s India client enterprise is valued at over $2 billion, in accordance with 4 sources.
“India is the jewel in the crown and will command a better price than the other markets,” one of many sources added.
Citi has been in India for many years and was among the many first to introduce Indians to bank cards in 1987. It ranks because the sixth largest native card issuer with almost 2.7 million playing cards.
Sources say Citi has a big share within the premium section, commanding increased spends per card of 10-25% versus the trade common. It can be among the many prime 5 wealth administration gamers, with 35 branches and about 4,000 workers within the client banking section.
Kotak Mahindra declined to remark, whereas Axis Bank and SBI Cards didn’t reply to a request for remark.
The different markets Citi is exiting as a part of its new CEO Jane Fraser’s technique embrace South Korea, Australia, mainland China and Thailand – nations the place it doesn’t have the required scale to compete with native rivals.
Singapore’s DBS and OCBC, Britain’s StanChart, and the Japanese lenders are additionally weighing bids for a few of Citi’s Southeast Asia companies, the folks mentioned.
Citi’s companies in Australia and South Korea may entice curiosity from home banks, they added.
