Race for Citibank India assets: DBS may drop out; all eyes on domestic banking heavyweights

Asia's Tech News Daily

#banking, #Citibank India, #DBS, #deals, Moneycontrol had reported

Representative Image (Source: ShutterStock)

In a key twist to the ongoing sale process for Citi Bank India’s consumer and retail assets, DBS Bank India, the wholly-owned subsidiary of Singapore’s DBS Group Holdings, and widely considered as one of the front-runners for the mega deal, is likely to drop out of the race, sources with knowledge of the matter told Moneycontrol.

This development, which comes days before next week’s binding bid deadline, paves the way for other suitors, including domestic banking heavyweights, to aggressively pursue the transaction. “DBS Bank India is likely to opt-out of the race for Citi Bank India’s assets due to high valuation expectations of the sellers,” said one of the persons cited above.

Two other persons also confirmed the above but added that the parent DBS Group Holdings is still keen to participate in the auction process for other Asian assets of Citi Bank which have also been put on the block.

All three persons spoke to Moneycontrol on the condition of anonymity.

When contacted, Citi declined to comment. Moneycontrol is awaiting an email response from DBS Group Holdings and has sent reminders. This article will be updated as soon as we hear from them.

In response to an  email query in April from Moneycontrol on its potential interest in Citi’s India assets, DBS had said, “At this juncture, the details are still unclear. However, we have always been open to exploring sensible bolt-on opportunities in markets where we have a consumer banking franchise (India, Indonesia, China and Taiwan) and where we can overlay our digital capabilities to serve our customers better.”

According to reports, Macquarie had estimated a value of $6.3 to $8 billion for Citibank’s consumer business across ten of the 13 markets in the Asia-Pacific region. The Indian business which is also part of these ten markets could fetch between $1.91 billion $2.15 billion, according to the brokerage.

In November 2020, RBI had announced a draft scheme to amalgamate ailing Lakshmi Vilas Bank into DBS Bank India, which is owned by Singapore based DBS Bank. In March 2019, DBS Bank adopted the wholly owned subsidiary model in India which makes expansion flexible for overseas banks and treats them at par with local lenders.

WHO ELSE IS KEEN ON CITI’S INDIA ASSETS?

“Citi’s exit from India will be an opportunity for players in India to either acquire the existing stock of clients and/ or gain market share in segments like credit cards, deposits and retail loans,” said Jefferies in a report released earlier this year.

On April 20, Moneycontrol had reported that the likes of DBS Bank, HSBC, Kotak Mahindra Bank & ICICI Bank are eyeing Citi’s domestic assets.

Later on April 25, Moneycontrol was the first to report that HDFC Bank may also join the long list of suitors for the high-profile transaction

CITI INDIA DEAL: WHAT IS UP FOR GRABS?

On April 16, Citibank said it will exit consumer/retail operations in 13 countries across Asia and Europe, including India to focus on the institutional and wealth management business in these markets. In India, the financial powerhouse had close to 30 lakh customers in retail, 22 lakh credit cards and 12 lakh bank accounts, as of March 2020.

This is not the first time that a foreign bank has decided to put its India assets on the block. Back in July 2010, HSBC had announced that it would acquire select retail and commercial assets in India owned by Royal Bank of Scotland. Back then RBI had given the green signal for the portfolio sale but was against the automatic transfer of RBS’s branch offices in India to HSBC, according to media reports.

Any sale of the consumer /retail assets of Citi India would be subject to an RBI approval, the bank’s officials had earlier told Moneycontrol.

The bank had advances of Rs 66,507 crore and deposits of Rs 1,57,869 crore. Citi’s retail revenue contributed 30 percent to the total in March 2020, while corporate pitched in with 50 percent. In 2018-19, retail contributed 34 percent and corporate 46 percent, according to the details available. Thus, the retail business had been struggling.

The percentage of non-performing assets (NPAs) to net advances has gone up to 0.56 percent as of March 2020 from 0.51 percent in the previous year.

Return on assets moderated slightly to 2.55 percent from 2.57 percent and business per employee improved to Rs 43.6 crore in FY20 from Rs 37.6 crore in the previous year. Interest income declined to 6.73 percent from seven percent during the period. Compared with this, Citi’s local rivals have been increasing the share of retail business increasingly using digital channels.

Internet Explorer Channel Network
Asia's Tech News Daily
News Related

OTHER NEWS

Stellantis wants to outfit cars with AI to drive up revenue

The Associated PressFILE – The Stellantis sign outside is shown on Jan. 19, 2021 at the Chrysler Technology Center in Auburn Hills, Mich. Carmaker Stellantis announced a strategy Tuesday to ... Read more »

Brussels wants more information about Nuance purchase by Microsoft

Photo: ANP The competition authority of the European Union wants more information about the acquisition of Nuance Communications by Microsoft. Brussels has asked customers and competitors of the two companies ... Read more »

House prices rising at fastest pace in 15 years on quarterly basis, says Halifax

The three month-on-three month increase of 3.4% is the strongest seen since 2006, the lender said, but it does not expect growth to continue at the same level into the new year. Read more »

Katrina Kaif and Vicky Kaushal may move into a rented beachfront property in Mumbai after wedding

Bollywood actors Katrina Kaif and Vicky Kaushal. (Image credit: AFP) Bollywood actors Katrina Kaif and Vicky Kaushal, who are in Jaipur for their wedding to be solemnized at a hotel ... Read more »

No sun, no stars for six months. How to work and live in the North

The chain of meteorology stations stretches to Chukotka - and at every station people are waiting for the supplies Read more »

Reliance, Abu Dhabi-based TA'ZIZ form joint venture for $2 billion chemical projects in Ruwais

The signing of the agreement was overseen by RIL Chairman and MD Mukesh Ambani and UAE Industry Minister Dr Sultan Ahmed Al Jaber. Oil-to-telecom conglomerate Reliance Industries Ltd (RIL) on ... Read more »

Stocks making the biggest moves premarket: American Airlines, AutoZone, GlaxoSmithKline and others

Check out the companies making headlines before the bell: American Airlines (AAL) – Chief Executive Officer Doug Parker announced he would step down from that job on March 31 and ... Read more »

DNB sees risks from corona, interest, inflation and technology

Photo: ANP Supervisor De Nederlandsche Bank (DNB) will pay a lot of attention next year to the risks that financial institutions ran due to the corona crisis. The persistently low ... Read more »

Instagram launches tool urging teens to take a break

The Associated PressFILE – This Friday, Aug. 23, 2019 photo shows the Instagram app icon on the screen of a mobile device in New York. Instagram on Tuesday Dec. 7, ... Read more »

Ngee Ann Kongsi's $2.94m donation to IPS will help fund interest-free loan project in Yishun

SINGAPORE – Low-income families who need some cash to pay the rent, medical bills or school fees can steer clear of illegal moneylenders and borrow from a community lending pilot ... Read more »

Rs 2,000 notes now 1.75% of total banknotes in circulation; down from 3.27% in Mar 2018            

Representative image The number of Rs 2,000 currency notes in circulation has decreased to 223.3 crore pieces or 1.75 percent of total notes in circulation (NIC) in November this year, ... Read more »

American Airlines CEO Parker to step down next March

The Associated PressAn American Airlines flight arrives at Miami International Airport, Monday, Nov. 8, 2021, in Miami. The U.S. says that as of Monday, with bans on travelers from 33 ... Read more »

DNB warns financial sector: do not wait any longer to consider climate risks

It is almost becoming a regular tune from De Nederlandsche Bank: the warning to the financial sector about the impact of climate change. It is really a risk for the ... Read more »

Astranis signs deal to bring satellite internet to 3 million people in Peru by 2023

A visualization shows an Astranis satellite over Peru in orbit.Astranis Astranis, a San Francisco-based company with an alternative approach to providing internet access from satellites, on Wednesday announced a deal ... Read more »

EU ministers clear the way for abolishing VAT on solar panels

Photo: ANP VAT levies on certain goods and services, including solar panels, water, passenger transport and live streaming of sports matches or shows, can be reduced in the EU to ... Read more »

EU agreement: The Netherlands may abolish VAT on solar panels and water

The Netherlands has argued in the past for the use of a zero rate, but this was only possible in specific cases, such as the supply and supply of ships ... Read more »

American Airlines CEO Doug Parker to retire, after 20 years at helm

Parker is the longest-serving chief executive of a major U.S. airline. Read more »

'Wind direction' partly to blame after thousands cut off by storm, energy boss tells MPs

Paul McGimpsey of the Energy Networks Association faced questions at a select committee over storm Arwen, which has left thousands of homes cut off. Read more »

Moscow court fines Google over $188,000 in four cases of unlawful content

As of now, Google has been fined a total of 58 mln rubles ($778,890) for the same offense Read more »

Large profit margins on cheap self tests but the market may be volatile: FD

A coronavirus nasal testing kit. Photo: Depositphotos.com Now that self testing is being encouraged, including for people with mild symptoms, the trade in tests is booming but purchase prices appear ... Read more »

SaaS startup MoEngage raises $30 million led by Steadview Capital

Customer analytics startup MoEngage on December 7 said that it has raised $30 million led by Steadview Capital, doubling its valuation to about $500 million in six months. While MoEngage ... Read more »

American Airlines CEO Doug Parker to retire, president Robert Isom to take reins March 31

An American Airlines plane lands at Ronald Reagan Washington National Airport November 23, 2021 in Arlington, Virginia.Drew Angerer | Getty Images American Airlines CEO Doug Parker, the longest-serving chief executive of a ... Read more »

Half of office occupiers with presence in tier-II cities using flex spaces: JLL- Awfis Survey

Almost half of the office occupiers who already have a presence in tier-II cities are using flexible spaces due to the availability of shorter leases and a cautious approach by ... Read more »

Chip companies lead in sharply higher AEX

The stock exchange in Amsterdam traded sharply higher on Tuesday, partly due to the gains made by shares in the chip sector. Investors were less concerned about the economic impact ... Read more »

Gainers & Losers: 10 stocks that moved the most on December 7

India’s benchmark indices ended higher on December 7 led by gains in auto, metal, realty and financial names. At close, the Sensex was up 886.51 points, or 1.56%, at 57,633.65, ... Read more »

CDL, Palo IT bag top prizes in Sustainable Business Awards for their green initiatives

SINGAPORE – Doing well by doing good – that is the philosophy of the companies that bagged awards for being sustainable at a ceremony on Tuesday (Dec 7). The desire ... Read more »

Small businesses welcome plans for UPI-like digital platform for MSME lending

Representative Image (Source: ShutterStock) A digital platform to provide quick and easy credit to the micro, small and medium enterprises sector can reduce paperwork and ease the flow of small-ticket ... Read more »

German investor confidence down due to Omikron variant

Photo: ANP German investor confidence has fallen due to the rise of the Omikron variant of the coronavirus. According to figures from the German research institute ZEW, investors are mainly ... Read more »

United Arab Emirates to move to Western-style Monday to Friday working week

UAE's government says the change will make it "the first nation in the world to introduce a national working week shorter than the global five-day week". Read more »

Racing Post-owner Spotlight Sports picks bankers in race towards £500m sale

Exponent Private Equity has appointed PJT Partners to handle an auction of Spotlight Sports, owner of the racing bible, amid interest from prospective buyers in the US, Sky News learns. Read more »

Russian cabinet considering Rosneft gas supplies to Europe, says Kremlin

Currently, only Gazprom has the right to export pipeline gas Read more »

Biden's Build Back Better bill may save you up to $900 when buying an e-bike. Here's how the proposed tax credit works

A man rides an electric bicycle near the pier in Huntington Beach, CA on Tuesday, April 6, 2021.Paul Bersebach | Getty Images Electric bicycles have soared in popularity in recent ... Read more »

Government may invite bids for Pawan Hans stake by January: Officials

Pawan Hans has the largest fleet of helicopters in India. The government plans to invite expressions of interest from potential bidders for Pawan Hans by January 2022 as part of ... Read more »

Intel wants IPO for Mobileye self-driving car division

Photo: ANP American chipmaker Intel plans to list its Mobileye division, which focuses on self-driving cars, in mid-2022. The company confirmed this on Tuesday after reporting it in The Wall ... Read more »

Edelweiss Financial Services NCD Issue: Should you invest?

Edelweiss Financial Services is issuing non-convertible debentures and the first tranche is available to investors from December 6, 2021 for subscription of up to Rs 500 crore. Investors will have ... Read more »

More than a third of Hong Kong firms to step up hiring, almost 60 per cent to increase pay, CPA Australia survey finds

An increase in hiring and pay rises are in store for Hong Kong next year thanks to an improvement in the city’s economic outlook, according to a survey conducted by ... Read more »

Electric driving is becoming more attractive, but ‘subsidy is still desperately needed'

The supply of affordable electric cars is increasing and at the same time the interest of Dutch car users in electric driving is growing. That writes the ANWB on Tuesday. ... Read more »

BMW hits 1 mn EV sales, targets 2 mn fully electric sales by 2025

BMW has sold its one millionth electric vehicle (EV) – including purely electric and hybrid vehicles – and plans to reach two million sales of purely electric vehicles by 2025, ... Read more »

Nestle India gets govt approval for PLI scheme for processed fruits, vegetables

FMCG major Nestle India said on December 7 that it has received approval from the government for the production-linked incentive (PLI) scheme for processed fruits and vegetables. In June 2021, ... Read more »

Government mulls over giving deadline to declare crypto assets: Report

(Image: Reuters) The Central government is considering to give Indian cryptocurrency holders a deadline in order to declare assets and become compliant with forthcoming new rules, according to a Bloomberg ... Read more »
On free-english-test.com you will find lots of free English exam practice materials to help you improve your English skills: grammar, listening, reading, writing, ielts, toeic