Image By: Can Pac Swire on Flickr

According to a report in the Economic Times, HDFC Bank, Kotak Mahindra Bank, Singapore-based DBS Bank, and two other lenders have merged as the top five competitors to take over Citi India's retail division, which is valued at roughly $2 billion.

According to the journal, in addition to HDFC Bank and Kotak Mahindra Bank, two more domestic private-sector lenders, Axis Bank and IndusInd Bank, are also in the running, and the shortlist might be reduced to three from five soon. According to the reports, Kotak Mahindra Bank, HDFC Bank, and DBS Bank are the frontrunners to get the franchise.

Citi India's retail franchise earns approximately a billion dollars in annual sales.

"Five banks have been shortlisted as top candidates for the India business, and the next step is to shortlist three suitors with whom Citi will negotiate a higher valuation," One of the two bankers mentioned above was quoted in the financial daily as stating this. "Citi is also looking to cut a better deal for its credit card business as it is a high-grossing book."

Also Read -

In August 2021, all banks will be closed for 15 days: The complete list of public holidays can be found here.

This company will connect 1800 Bank of India branches to satellite internet!

Cabinet approves DICGC Act amendment; bank depositors will be covered up to Rs 5 lakh.

DBS Bank's acquisition of a slice of Citi's Indian business would give the Singapore bank a stronger presence in the country. A DBS representative told ET, "While we, from time to time, evaluate potential bolt-on opportunities in markets where we are active, we do not comment on the specifics of any particular opportunity,"

HDFC Bank, Axis Bank, and IndusInd Bank did not answer ET's email enquiries, while Kotak Mahindra Bank declined to comment.

A Citi spokeswoman in India reaffirmed the company's commitment to the country's institutional business while declining to comment on the specifics of the retail bids that have purportedly come in.

"But we have seen strong interest in our consumer business," Citi's representative stated. "As with deals of this nature, the likely transaction process will customarily take place over a number of months and will require interaction with a wide range of interested buyers."

Citibank has opted to abandon the retail business in 13 markets in order to save money and concentrate on higher-yielding ventures. Citi management, lead by Jane Fraser, the bank's first female CEO, has indicated that the departure process is beginning and that, while the bank will work to complete the exits as quickly as possible, there will be no fire sale in the country. 

"Lenders in the fray want to preempt competition and avoid a situation where other banks grab a larger market share," ET was told by the second banker mentioned above. "For some banks, a higher-yielding credit card book could be a good fit and would help reduce costs."

Citi's consumer business makes up nearly a third of the overall Indian business's profitability, while the full India business makes up only 1.5 per cent of the worldwide book's profits. Credit cards, deposit accounts, wealth management, and the Indian mortgage portfolio are all part of the Indian retail basket. Citibank's India unit had a market share of 0.6 per cent for advances and 1.1 per cent for deposits, respectively.

Citibank has 2.8 million retail customers in India in June, 1.2 million bank accounts, and roughly 2.6 million credit cards. Since proclaiming its demise, it has lost over 100,000 customers. As of March 2020, it operated almost 35 branches across the country and has deposits of Rs 1.6 lakh crore.

(Source: Times Now)