The next big task for Citigroup now is to find a suitable buyer who has the financial bandwidth to keep the business running and also seek regulatory approvals subsequently.
Citigroup, the parent organization of Citibank has decided to exit the retail banking sector in India and 12 other countries. Other countries include Australia, Bahrain, China, Indonesia, Korea, Malaysia, the Philippines, Poland, Russia, Taiwan, Thailand, and Vietnam. Citibank is India’s largest foreign bank operating since 1902.
This major jolt to the financial world came after the first-quarter earnings of 2021 were announced by Citigroup’s global CEO Jane Fraser. While many believe that this move is a result of the bank’s stressed financial health, Fraser said that this is a part of their global strategy where they want to focus on regions that will yield higher returns for their shareholders
Putting the fears of employees’ layoffs and closing of consumer bank accounts to rest, a Citibank India official, while talking to CNBC TV18 confirmed that “There is absolutely no impact on the customers. If a customer walks into our branch tomorrow to get a card or open an account, we will still do it.”
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More importantly, the next big task for Citigroup now is to find a suitable buyer who has the financial bandwidth to keep the business running and also seek regulatory approvals subsequently.
Several names have been doing the rounds for a potential buyer. As per Business Standard, among the Indian banks, ICICI Bank, Kotak Mahindra Bank, and Axis Bank are strong contenders for acquiring Citibank’s Indian operations. Among the foreign banks, DBS Bank based in Singapore which acquired Laxmi Vilas Bank in November 2020 is touted as a strong contender.
As of March 2020, Citibank in India has 2.9 million retail customers with 1.2 million bank accounts and 2.2 million credit card accounts. Citibank has 35 branches in India which employs over 19,000 people.
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