Citi was once a market leader in India’s credit card business. In the past few years, Citi lost its dominance to other players and therefore slowed down its customer acquisition game even before the final decision of moving out of the business.
Notably, Citi’s clientele mostly includes high net worth individuals (HNIs). Most of the companies are now eyeing to beef up their credit card business with the lucrative acquisition opportunity.
Therefore, it’s very likely that even foreign banks might also show interest, especially with the RBI recently amending norms recognising standalone credit card companies. “Foreign banks might also look to expand presence, and we note that DBS had recently acquired branches of Indian bank (LVB) to expand presence in India — other large foreign banks in India are HSBC and StanChart,” Jefferies said in its report.
As of now, the State Bank of India’s (SBI) credit card division, SBI Card, is seen as a major contender for Citi’s credit card business. The firm’s share price soared by 6.88% on NSE and by 7.5% on BSE on Friday.
Meanwhile, HDFC might also throw its hat into the ring. However, India’s largest private lender can’t proceed ahead with the acquisition due to certain restrictions placed by the Reserve Bank of India (RBI), according to a report by Times of India.
Suresh Ganapathy, research analyst at Macquarie Capital, told TOI that Citi is likely to sell individual business segments to different players. And multiple banks are interested in the card business. “We believe smaller players like RBL, IDFC First Bank, etc, could be more aggressive in terms of bidding for the credit card book,” he was quoted as saying.