CEO Jane Fraser said that the group lacks the scale to compete with the domestic lenders in India, even though the market has excellent business.
Despite setting roots in India in 1902, Citigroup sold its Indian consumer business arm to domestic lender Axis Bank. In the country’s rapidly transforming economic and banking landscape, Citibank was unable to garner a sufficient market share in the consumer banking sector, which it forayed into in 1985. As a result of this, the group decided to exit its retail business in India. However, the bank isn’t the first foreign lender to leave the country. With this move, it has joined the ranks of Deutsche Bank, HSBC and Standard Chartered, who have all significantly scaled down their operations in India.
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Citigroup announced its exit in May 2021. Chief Executive Officer Jane Fraser said that the group lacks the scale to compete with the domestic lenders, even though the market has excellent business. Along with India, the group has exited consumer operations in twelve countries, including China, Australia, Malaysia, Bahrain, Korea, Indonesia, Russia, Vietnam, Philippines, Thailand, Poland and Taiwan.
The group’s focus instead, will pivot to wealth management as it sought to overhaul its business operations and strategy. Fraser said, in a release, that this move to hone in on the remaining markets “positions us to capture the strong growth and attractive returns the wealth management business offers through these important hubs.”
When the acquisition by Axis Bank was announced, Peter Babej, Citi Asia Pacific CEO, said, “Our announced transaction with Axis, a leader in Indian financial services, represents an important milestone for our franchise and offers an excellent opportunity to our consumer banking colleagues in India. As we move forward with this transaction, India remains a key institutional market for Citi. In line with our broader strategic repositioning, we will continue to support our institutional clients in this core market and across APAC, delivering the full power of our global network to enable their growth.”
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Axis Bank completed the purchase of the bank giant’s Indian consumer banking portfolio and NBFC consumer business on 1 March for a total consideration of Rs 12,325 crore. The country’s private sector lender absorbed Citibank’s consumer businesses covering retail banking operations, loans, credit cards, and wealth management in India.
