Citigroup is the amalgamation of two huge companies. One is Citicorp and another is a travel group. The company was a mix of both these giants. Later on the company got divorced with its financial giant Travellers group in 2002. From there on it has been under Citicorp. The Company is an American giant and has been working for a long time. It is spread in more than 155 countries and has a client base of over 220 million accounts. The employees under the company name are more than 3.5 lakh. Hence Citigroup comes under the heading of companies which are too big to fail. The asset base of Citigroup overall the world is more than 24 trillion dollars.
Indian Operations of CitiBank
The banking institution is headquartered in Bandra. The major operations of the company lie in the Chennai and Kolkata area. The company functions actively in the field of :- Loan disbursement, Investments, Insurance business, Capital Markets, NRI banking, Private Banking and Debit – Credit Cards. Company has been a major dominating firm in Markets as well as banking activities.
The Citibank being one of the major finance institutions in the country has recently contested a very surprising move. As per the bank’s new move it will stop its operations in 13 countries across the globe. These countries include India, Bahrain, Indonesia, Australia, China, Malaysia, Korea, Russia, Philippines, Poland, Vietnam, Thailand and Taiwan. The move has shocked many people. The reasons cited were not bank failures but a shift in strategy.
Which Segments are Ended By CitiBank ?
Citibank has not been contributing that much in Indian operations of the banking segment. However the credit card line of business is a major income earning facility for Citibank. The reason is the premium list of clients that Citibank owns. The bank has also been active in currency conversion and other banking functions which is a key function for the bank. The bank’s business that is getting an exit tag is Credit card business, mortgage business and deposit accounts. These are the sectors which the bank have planned to exit from. They would soon be listed on the market for sale and the local banks or Foreign banks planning to enter India Would be grabbing the opportunity. Due to the deep valuations of all the sectors and more than 4000 employees involved in the procedure, the government cannot handle loss of such a huge bank. Hence the bank’s operations may also be taken over by the Reserve Bank of India.
The credit card business of Citibank is the best in its basket which can lure other institutions. The reason is the premium card range and the corporate card range as well. Even the large banking companies such as Axis, ICICI or SBI cards can also opt for it. Previously the bank had captured more than 20% of the Indian market with its credit card business. Due to competition from SBI cards and HDFC bank the share has come down to 4% today. Tius is though a massive loss but a huge figure as well in terms of the turnover gained from this stake.
Why is CitiBank Leaving ?
The reason stated by the bank is that it wants to shift its focus from global business to institutional business. The bank wants to focus on the institutional road. Citibank has put on market the advances and deposits worth more than 2.4 lakh Crore Rs.
The bank admitted that due to small business in the 13 countries it wants to expand and focus on segments where it has a strong presence. The bank wants to focus its institutional and wealth management business. The reason is the major generation of earnings globally comes from these two segments, the banks has centric locations wherein it functions exceptionally well. Hence the bank is focusing on its strength and letting go of the business where it does not have major performance.
Impact Of CitiBank In India
Citibank was one of the pioneers to bring in the advanced ATM services in India. Citibank was the initiator in the process of issuing credit cards. The bank was also actively involved in the capital markets and is still doing well in that segment. In India Citibank serves more than 3 million customers and has more than 1.5 million bank accounts. The bank also has a credit card base of more than 2.3 million accounts.
It was the market leader in the 80’s and 90’s but later on due to competition from HDFC and SBI cards its market share declined drastically. The bank is a US giant and is serving its services for more than 10 decades. The bank has heavy investments into government bonds and depositories as well. CITIbank also has a huge currency pocket and this is the reason why it is very attractive for major banking firms in India or outside India.