NEW DELHI: Citigroup may have decided to exit its consumer banking business in the Indian market along with that of 12 other countries but its consumer banking operations, especially the high-margin cards business, could be an attractive bet for a number of domestic private banks that are keen to shore up their retail book.
According to Macquarie Research, large and mid-sized lenders could be among key contenders for the various businesses—credit cards, wealth management and mortgages Citibank has put on the block. “We believe smaller players like RBL, IDFC First, etc could be more aggressive in terms of bidding for the credit card book, while larger ones could bid for mortgages and wealth portfolios as it compliments their existing strategy,” said Suresh Ganapathy Macquarie Capital Securities.
For instance, IndusInd Bank has been focusing on wealth management of late and it could pick up this portfolio. Earlier, the new-generation bank had profited from the acquisition of Deutsche Bank’s credit card portfolio in 2011 and followed it up by buying Royal Bank of Scotland’s (RBS) diamond and jewellery financing business in 2015.
When RBS exited India, RBL Bank pipped IndusInd Bank in the race to buy RBS’ business banking, credit cards, and mortgage portfolio in India. Citi’s credit card segment willlikely find many suitors too owing to its affluent client mix. “SBI Cards will be a key beneficiary on improved visibility of market share gains. We expect top private banks like ICICI, Kotak to reach out to acquire client stock here,” said Siji Philip, Axis Securities.
Citi commands over six per cent of the country’s credit card market as on February-end—the largest among foreign banks in India. Ashish Gupta, head of research, Credit Suisse said that Citi’s retail business may add about 6 to 10 per cent to the retail book of larger private banks in India. Kotak Bank has been looking for inorganic opportunities, and Gupta expects the lender to be a key contender to acquire Citi’s retail operations.
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