Private sector banks & foreign lenders eye Citibank’s consumer banking franchise: Analysts

Foreign and private sector lenders may vie for the consumer banking franchise of Citi India, particularly credit cards, analysts said. Citbank has recently declared that  it would exit the consumer banking business in India and 12 other countries. The consumer banking business covers retail banking, credit cards, home loans and wealth management.

According to the analysts, the business could generate interest from both big and small private sector banks apart from foreign lenders such as HSBC and Standard Chartered who would be keen to expand their presence through such an acquisition.

According to the analysts at Jefferies, Citi India has $4.1 billion in retail assets. In India’s retail segment, Citi has built a stronger presence in credit cards where it has a 6% share of total spends. Besides, 40% of its retail loan exposures are in housing.

Jefferies said, “Citi’s exit from India will be an opportunity for players in India to either acquire the existing stock of clients and/or gain market share in segments like credit cards, deposits and retail loans.”

Jefferies further added, “Private banks and credit card companies like SBI Cards can be key beneficiaries of market share gains in the credit card segment. Some smaller private banks might be interested buyers of the India portfolio as they are looking to scale-up in the segment. Foreign banks might also look to expand presence.”