Amidst increasing bullishness about the credit card market, a handful of top domestic banks including HDFC Bank and Kotak Mahindra Bank are being seen as front runners to acquire Citi’s credit card division in India.
According to sources, about 5-6 banks are in the fray to bid for Citi’s credit card business in India. These include HDFC Bank, ICICI Bank, Kotak Mahindra Bank and DBS Bank India, the sources said.
HDFC Bank, ICICI Bank and Kotak Mahindra Bank did not respond to an e-mail from BusinessLine.
DBS Bank India and Citi declined to comment on a similar e-mail query sent by BusinessLine.
Many Indian lenders have been looking to scale up their credit card business and Citi’s high-quality customer portfolio will be a useful addition, noted a source.
Brokerage firm Jefferies said in in a note in April that Citi’s exit from the retail business in India may open opportunities for Indian private banks, credit-card players and foreign banks in the country.
Citigroup had in April this year announced its decision to exit its consumer banking operations in India as part of an ongoing strategic review, which was part of strategic actions in the Global Consumer Banking space across 13 markets.
Citi has, however, been losing its market share in the country and valuations could prove to be an issue.
According to data from the Reserve Bank of India, Citi Bank had 25.93 lakh outstanding credit cards at the end August 2021, compared to 26.21 lakh at end of April 2021 and 27.39 lakh at the end August 2020.
It is estimated to have about a 4 per cent market share in the credit card segment in terms of numbers and 5 per cent in terms of spending.
Any sale of assets willrequire approval from the RBI and is likely to take at least another 4-5 months.