Citi wants slice of retail brokerage

BANGALORE: Citigroup is gearing up for big action in the retail brokerage space. Speaking to ET, Citi CEO-India & area head (Bangladesh, Nepal and Sri Lanka) Sanjay Nayar said the idea of going into retail brokerage was to expand the range of products and offerings targeting the Indian customer.

“The(retail brokerage) model will be both online as well as brick and mortar entities. It is a business which would take-off based on the experience of Saloman Smith Barney( part of Citigroup) in the US. We want more of the client’s wallet,” he added. He said that instead of looking at inorganic growth opportunities, Citigroup was keen to build its business organically.

Citigroup’s decision to foray into retail brokerage comes at a time when thanks to the “India shining” story, the retail or the small investor has thrown his hat into the ring making a whole host of brokerages like India Infoline and Anand Rathi Securities eye this business.

Citi’s decision to enter retail broking will pit it directly in competition with other banks like ICICI Direct.com(from ICICI Bank stable), HDFC Securities(from HDFC Bank).

On the mutual fund side, Mr Nayar said that the bank had no plans to set up its asset management company(AMC). “We will leverage our branch presence and continue on the open architecture based selling model. Hence setting up an AMC is not on the cards,” he added.

The AMC business has become yet another hot sector given that over half-a-dozen firms have filed application with the Securities & Exchange Board of India (Sebi) to set up AMCs. Interestingly enough Citi’s peers like HSBC and Deutsche Bank are also into manufacturing (having their brand) mutual funds.

Mr Nayar said that Citibank intended to use its technology prowess and distribution strengths to tap more into the Indian consumer. It expects the small and medium enterprise(defined as organisations with turnover in the range of Rs 5 crore to Rs 50 crore) and lower-middle class to account for about a fourth of its total business by 2009.