Citi unseats StanChart as top foreign bank

MUMBAI: There has been a change in the rankings of foreign banks operating in India. Citi has emerged as the country’s largest foreign bank, a position held by Standard Chartered Bank for the past 6 years. The total asset base of the US-based bank in India stands at Rs 66,358 crore as on March 31, 2007, compared with StanChart’s Rs 58,853 crore.

However, on profitability, StanChart is still the number one foreign bank. It reported a 51% rise in profit to Rs 1,364 crore for the year, while Citi reported a 27.5% rise in net profit at Rs 900 crore. As a conglomerate, Citi’s net profit rose 39% to Rs 1,566 crore from Rs 1,127 crore. The group balance sheet in India rose 46% to Rs 84,469 crore from Rs 57,893 crore.

Citi has the largest non-banking finance network in the country. Citi Financial, its consumer NBFC, has reported a 30% rise in profit at Rs 222 crore (Rs 171 crore), CitiGroup Global Markets’ profits doubled to Rs 265 crore (129 crore). Rest of the profit came from other NBFCs and outsourcing operations. The profits of its NBFC operations seem to have grown at a faster pace than its banking operations.

Foreign banks have, in the last couple of years, been growing at a rapid pace in India. HDFC Bank, the second largest private sector bank, has a total asset base of Rs 91,235 crore (net profit Rs 1,141 crore), while UTI Bank has a total base of Rs 73,257 crore (net profit Rs 659 crore). However, none of these private sector banks have NBFC operations.

StanChart has 81 branches in 31 cities, while Citi has 39 branches across 27 cities. However, Citi Financial is the largest NBFC in the country, with a network of 450 branches in 180 cities. With India Inc on an acquisition phase, most foreign banks, including Citi and StanChart have been lending to their global needs. Citi, for instance, has helped in financing up to $15 billion of acquisitions by Indian corporates overseas.

The interest income of the bank saw a 43% rise to Rs 4,383 crore, while other income rose 29% to Rs 1,345 crore. The interest expenses rose 68.7% to Rs 1,696 crore, while operating expenses rose 21.5% to Rs 1,852 crore. Provisions and contingencies rose 46% to Rs 1,280 crore. Deposits of the bank grew 35.7% to Rs 37,875 crore, while advances rose 34.3% to Rs 32,861 crore.

Sanjay Nayar, CEO, Citi India, said: “While about 70% of the profits came from corporate and investment banking, 30% came from the consumer side. The revenues were more balanced, with a 50-50 break-up between corporate and consumer. The bank has adopted a path of heavy investment and building distribution on the consumer side. We went on a hyper mode of client acquisition.” Citi added close to 2,000 SME clients in the past fiscal.

The group’s retail customer base is now at 7.25 million. PS Jayakumar, country business manager, global consumer group, Citibank, said: “Citi Financial customer base is now at 2.2 million. We have added 350 relationship managers for the wealth management business. In the past one year, Citi Financial has added 150 branches.”

There has been a rise in mortgages by 50% and personal loans by 48% across the group.
The roadshows for the $5 billion infrastructure fund, which was launched by Citi, Blackstone and IDFC, have taken off. Citi is expected to invest around $100-150 million in the first phase of the fund. They are on the lookout for other investors like multilateral agencies.