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BW Businessworld

In The Money

With transactions, retail, SMEs, wealth management, Citibank India is raking in the profits

Photo Credit : Umesh Goswami

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Though CitiBank ranks as the fourth-largest lender in the US and one of the largest on the planet, its Indian arm will chase growth for its sake. Instead, Citi has held to its conservative streak — and, of course, it has turned out to be its winning strategy. Look at some of the parameters: operating profit in FY15-17 grew a mere 6.53 per cent, net worth expanded 6.69 per cent. But it is still the runner-up in the ‘Best Foreign Bank’ category in the 10th BW Businessworld Best Bank Survey 2016-17.

In India, Citibank operates across the banking spectrum, right from capital markets to private and SME banking. It has organised its business under two major segments: institutional clients group (ICG) and Global Consumer Bank (GCB). The ICG division offers global banking access to global markets, treasury and trade solutions, securities and fund services, and the research capabilities of its analysts. It also offers investment banking. Citi helped raise $78 billion in equity capital since 2005, and is among the top firms in investment banking  in the country.

Its Global Consumer Banking division serves up an entire gamut of services to consumers, right from the salaried classes to the affluent and the high networth individuals. Also, it addresses its clients’ requirements for wealth management. Besides, it has 2.6 million credit cards in circulation. In October ’17 it had an 11 per cent share of card-spend.

Citibank India is facing the headwinds of a slowing economy. In fiscal ’17, its advances stood at Rs 54,857 crore compared to Rs 61,551 crore in fiscal ’16. The bank’s operating profit rose to Rs 6,788 crore in fiscal ’17 as against Rs 6,162 crore in fiscal ’16, an increase of 10 per cent. Net profit increased 12 per cent to Rs 3,626 crore in fiscal ’17 as against Rs 3,232 crore.

Its tight control on who it vends credit to helped it keep its non-performing assets (NPA) low. In fiscal ’17, its net NPAs were 0.46 per cent (0.49 per cent). At the same time, it improved its return on assets to 2.45 per cent (2.2 per cent).

What’s more, its dynamic CEO, Pramit Jhaveri is steering it towards more profitable growth in coming years, looking at more lucrative areas of private banking.

Don’t take your eye off of this one.