Citibank: Citi’s card wallet shrinks as its retail release in India approaches

Mumbai: Even as banks’ credit and debit card issuance increases across the board, Citibank’s outstanding card portfolio is down this fiscal year, especially after news of its decision to go out of business was announced retail in India.

Credit card outstandings fell from 2.62 million in April to 2.59 million in July and again to 2.58 million in October. Their number stood at 2.73 million in October 2020.

Likewise, outstanding debit cards fell from 1.64 million in April to 1.61 million in July and 1.58 million in October.

This drop comes even as local banks gained market share as pent-up demand led to spending growth after the Covid-19 restrictions were lifted.

SBI Card increased its credit card outstanding to 12.76 million in October 2021, from 12.24 million in July and 11.92 million in April. ICICI Bank increased its outstanding credit cards to 11.97 million in October from 10.72 million in April. Axis Bank also increased its share to 7.73 million in October from 7.20 million in April.

Citi’s drop in credit card issuance is also odd given that local lenders gained market share at the expense of leading HDFC Bank after the RBI banned the lender from issuing credit cards in December 2020. due to several technical issues. Interestingly, since the ban was lifted in August, HDFC Bank’s total cards in circulation rose to 15.24 million in October, from 14.91 million in April, after dropping to 14.76 million in July. .

Responding to an email seeking comment, a Citibank spokesperson said the drop was small and still above average. “The slight decline in Citi credit cards is due to external circumstances beyond our control,” the spokesperson said, referring to the ban on Mastercard, Citi’s main card issuer. “Our card transaction is 1.7 times the industry average and card spend 1.2 times the industry average, reflecting the strength and quality of our card portfolio,” added the spokesperson.

“The drop is due to the risk aversion strategy employed by the bank after the pandemic,” said a person familiar with Citi’s business in India.

Card decline comes as bank finds buyer for its retail business in India, which includes credit cards, savings accounts and personal loans in announced global exit decision from 13 markets in April. Kotak Mahindra Bank, Axis and IndusInd Bank have reportedly made formal offers to take over the bank’s retail franchise.

Bidders are also aware of the decline in the bank’s card wallet. “It has been found that every time a financial business is put on hold, we see 5-10% attrition among customers and Citi’s numbers are consistent with this trend,” said a person closely involved in the process. one of the offers.

In addition to getting good value for the business, the US lender will also evaluate offers based on those that are best suited to their clients. “Some of these customers have been with Citi for a long time. So besides the money, the bank will also look for what is best suited and will ease the transition even if this offer is a little lower than the best offer,” said the person quoted. earlier said.

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