Citibank India CEO calls selling consumer business to Axis an 'emotionally difficult decision'

Citibank India, which had 2.2 million credit card accounts and average credit card spends 1.4x the industry average, shocked India’s banking sector when it decided to sell off its retail banking division to Axis Bank in 2022. Not just in India, but NASDAQ-listed CitiBank also shut its consumer banking businesses in 13 other countries across Asia and EMEA.  

Calling it an “emotionally very difficult decision”, CitiBank India CEO Ashu Khullar said, “But there reaches a point where a strategic decision could vary with the emotional decision. Strategically, the decision to exit consumer banking in India and 13 other countries was right. Each bank needs to play to their competitive strengths.”

“And the decision is not mutually exclusive with us being bullish on India. It only means we will re-deploy our capital,” he added.  

Khullar was speaking at Business Today’s flagship Banking & Economy Summit 2023 in Mumbai on Friday. He further shared that CitiBank’s second-largest workforce in the world remains in India, trailing only the US. “We also have a vibrant 10,000-strong global capability center (GCC) in India. This market is big enough for all of us and our public sector colleagues to thrive in,” he said.

Khullar shared that despite Citi’s consumer business being the “more of a brand” in India, besides being much loved for its Citi Cards product, the bank has been running a “profitable institutional business too”. “While the consumer business was loved, the returns in our institutional business in proportion to profitability and revenues is much higher,” he revealed.

Foreign banks, which have had a bit of a mixed history in India so far, can change their fortunes over the next few years given the projected growth in the country’s per capita GDP as well as the rising demand for institutional credit.

Khullar said, “As a foreign bank, we are very well poised to add value for India to exploit… to get FDI in, get portfolio investments in, help Indian companies go global and make them more efficient with digitisation. So, this is a very exciting time for us.”

Echoing him on the panel was HSBC India CEO Hitendra Dave. “It is difficult to not be bullish about India, both on an absolute and relative basis,” he said. “Once per capita GDP in India crosses the $3,000-3,500 mark, as China did 25-30 years ago, it will be a J-curve for everyone. That is one reason driving our bullishness,” he explained.

As India trades more internationally, HSBC looks to become the one-point bank for all needs. “There is space for one international bank to grab the full spectrum, from checking accounts, mortgages and credit cards to investment banking and corporate banking. We hope to be that bank. That underpins our optimism in India,” he added.

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