Candidates for Citibank’s retail division are still in the due diligence phase

It may take time for Citibank until December to finalize a buyer for its retail business, sources familiar with the talks said.

There has been no decision on a buyer, or no shortlist made, a source said.

“The bank is in the process of answering all questions posed by potential buyers. This process will be completed by the end of this month, then bids will be solicited in sealed envelopes. It will take at least two to six weeks to start seriously considering a buyer, ”the source said on condition of anonymity.

Therefore, the question of a few leading banks does not yet arise, the source said.

Another source said that virtually all banks are looking for details on the books of the retail branch for due diligence purposes. “After the due diligence period ends, starting next month, we will not be looking at a single issue,” another source said.

An email sent to Citibank did not elicit a response.

On April 15, Citigroup announced that it would leave retail banking in India and 12 other countries in Asia and parts of Europe to focus on its wealth management business because it did not have the “ladder” to compete in this space.

One of the first steps new CEO Jane Fraser took after taking over the U.S.-headquartered bank in February was the decision to exit retail outlets in a few markets.

Along with India, Citigroup announced that it will also withdraw from its consumer franchises in India, Australia, Bahrain, China, Indonesia, Korea, Malaysia, Philippines, Poland, Russia, Taiwan, Thailand and Vietnam.

The consumer banking vertical contributed 30.6% of turnover at the end of March 2020 of Citibank in India, against 37.38% in 2012-13 and nearly 39.19% in 2009-10.

In 2012, with a 21% market share, Citibank was India’s second-largest credit card issuer, while card spending was double the industry average; it also held a 30 percent share of e-commerce spending. In 2020, its market share fell to around 6% and sixth place, although average spend per card remained 1.4 times the industry average.

The customer base is also generally at the higher end of the spectrum for the bank, making it an attractive buy for Indian retail-oriented private banks.

Most of them are busy doing the due diligence process until the window closes this month.

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