The US banking giant, Citigroup announced on Thursday that it will exit 13 international consumer banking markets with the target of specializing in wealth management and institutional business. It will not sell its wealth management and institutional business, which is a major source of its income. The target markets of Citigroup’s global consumer banking business will be Singapore, Hong Kong, London, and the UAE.
The US giant indicated that there will not be any layoffs or closure of offices in India, and that it will sell off the retail accounts and credit cards. Citibank India started operating in 1902. It offers its services to 2.9 million retail customers, with 1.2 million bank accounts and 2.2 million credit card accounts. The bank has around 6% market share of retail credit cards spent in the country. Citibank is known for popularizing the concept of credit cards and ATMs in India in the ‘80s.
Sources say that the bank will not immediately change its operations, and there will be no immediate impact on the employees owing to this announcement. For the time being, the company will keep on serving its clients with equal care, empathy, and dedication. As on March 2020, the total assets of Citi franchise in India, including the credit provided to Indian institutional clients from offshore Citi entities, was Rs 2,99,250 crore.
The banking giant did have difficulty in scaling up the consumer banking business, however, it had always earned comfortable profits for the bank. It had earned a net profit of Rs 4918 crore in the year ended March 2020. However, the bank’s bulk profit came from its other source of income. The bank made profit worth Rs 2334 crore on exchange transactions in FY2020, and it also earned income of Rs 1727 crores in commission, exchange, and brokerage during that year.
While speculations run rampant about who will buy the bank’s retail business, experts feel that it will be difficult to find a big buyer, who will acquire the license in current times. The new buyer will also have to fit the criteria set by the Reserve Bank of India.
