BreakingviewsCapital Calls: India shines in Citi’s consumer bank selloff

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SHINING BRIGHT. Citigroup’s (C.N) consumer banking business in India may be the most valuable of the 13 markets boss Jane Fraser has ordered the U.S. bank to retreat from read more . Unlike in China, in India a sale offers rivals a juicy chance to bulk up.

Conservatism has cost Citi. Its Indian wealth management business is large, but its share of credit cards has fallen to 4% from more than 10% over a decade as the market has rapidly expanded. Its customers spend more than average, however.

Focusing on the affluent has kept books clean. Citi could add more than one-quarter of loans to the retail portfolio of $47 billion Kotak Mahindra Bank (KTKM.NS), Credit Suisse notes. Singapore’s DBS (DBSM.SI), led by an ex-Citi banker, is in expansion mode too and may also be keen.

Citi’s consumer bank, which generated about $730 million of revenue in the year to March 2020, could expect a premium valuation; analysts privately guess it could fetch between $3 billion and $5 billion. Rivals SBI Cards and Payment Services (SBIC.NS) and IIFL Wealth Management (IIFW.NS) trade on 10 and 4 times expected book value. India is a prime morsel. (By Una Galani)

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