Citi India institutional asset book crosses ₹1 trillion after retail exit | Company News

The bank added about ₹24,000 crore to its institutional asset book in the last 12 months, a 30 per cent increase, reflecting robust client activity, increased capital investment, expanding trade flows and sustained financing demand across key sectors of the economy, a senior Citibank official told Business Standard.

Citibank N.A. India’s institutional asset book is spread across Indian corporates, multinational companies, financial institutions and commercial banking clients, with lending across working capital, trade and supply-chain finance, as well as structured financing, including pass-through certificates (PTCs) and corporate bonds.

“This milestone reflects the scale of the institutional opportunity in India, the strength of the platform we have built to serve it, and the focused investments Citi has made to grow the institutional banking business,” said Jeegar Shah, chief financial officer, Citi India.

“As envisaged under the strategy refresh, following the divestiture of our consumer banking business in March 2023, we have redeployed capital and resources to support growth in our core institutional business. Since then, the institutional asset book has nearly doubled, with approximately 60 per cent of the growth coming from loans, comprising trade loans, corporate loans and so on,” Shah told Business Standard, adding that the remaining growth has come from structured products, including securitisation, commercial paper, corporate bonds and related products, which have grown nearly fivefold over the same period.

“There was zero doubt in any of our management’s minds that the strategy refresh would be accretive to us. We doubled down on institutional business where we deliver sustained competitive differentiation and create meaningful value for our clients,” he said.

According to Roshni Shroff, country treasurer, Citi India, the growth in the institutional asset book over the last three years has been driven by client demand, but underpinned by disciplined liquidity, funding, capital and risk management. “Our credit numbers, as well as our capital ratios and liquidity ratios, are all in the public domain. They clearly show that we have a fairly robust risk culture as well,” she said.

Citi’s decision to exit consumer banking in India was part of a broader global strategy announced by chief executive Jane Fraser shortly after she took charge in 2021. Fraser announced plans to exit consumer banking in 13 markets as Citi sought to simplify its business, reduce costs and redeploy capital towards its institutional franchise.

In India, Citi completed the sale of its consumer business to Axis Bank in March 2023. The transaction, first announced in March 2022, covered credit cards, retail banking, wealth management and consumer loans, as well as the transfer of around 3,200 employees. The deal also included Citi’s asset-backed financing business, comprising commercial vehicle and construction equipment loans, and the personal loan portfolio of Citicorp Finance.

Citi’s institutional client businesses were excluded from the transaction, allowing the bank to retain its institutional and corporate banking franchise in India. The consumer business had been a significant part of Citi’s more than 100-year presence in India, including its role in pioneering credit card technology in the country.

Following Citi’s exit from consumer banking, several other foreign banks, including London-headquartered Standard Chartered and Germany-based Deutsche Bank, have also scaled back or exited their retail franchises in India. Standard Chartered first sold its personal loans business to Kotak Mahindra Bank and subsequently its retail credit card portfolio to Federal Bank. Deutsche Bank, meanwhile, sold its retail banking, affluent private banking and wealth management businesses in India to Kotak Mahindra Bank. The transaction covered a business with around ₹29,000 crore in assets, ₹16,000 crore in deposits and ₹10,500 crore in assets under management, serving approximately 150,000 customers.