Tag: citi

Banking and finance firms on hiring spree across colleges, BFSI News, ET BFSI

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Top banking and financial services firms are on a hiring overdrive across the country’s leading undergraduate and engineering colleges and business schools on the back of growth across businesses and an increasing push for digitisation in a post-pandemic world.

Apart from jobs in finance, operations, treasury, risk, analytics, research, investment banking and corporate banking, the big focus this year is on technology roles, a post-covid phenomenon where organisations in the BFS space have begun placing much greater emphasis on the need to scale up their digital offerings.

Axis Bank plans to bring in 50% more campus hires than last year; Goldman Sachs’ India campus hiring for 2022 will increase by 27% with over 1,900 hires, including interns; for JP Morgan, the campus intake will go up by 23% for full-time analysts and 38% for interns. Others including Citi, Deutsche Bank and Mastercard are hiring aggressively as well, especially for digital skills.

“For 2022, our campus hires will increase by 43%, 24% and 6% across graduate colleges, engineering colleges and business schools, respectively. This is reflective of our growth across businesses and the availability of world-class talent in India,” says Deepika Banerjee, co-head of Goldman Sachs Services. A key element of the firm’s campus hiring strategy in India is to onboard talent through internship.

For JP Morgan, campus recruitment contributes significantly in meeting increased hiring numbers by bringing in entry-talent talent. “The increase this year is fuelled by growth in hiring requirement across all lines of businesses and primarily for technology and techno-functional roles,” said Gaurav Ahluwalia, head of HR, India Corporate Centers, JP Morgan.

“Citi is committed to staying ahead of digital transformation across geographies and our institutional and corporate banking businesses in India. Talent from India is key to supporting these focus areas,” says Aditya Mittal, interim CHRO for Citi India.

With India having cemented its status as a global technology hub, an additional factor driving the demand for talent is the continued flow of work from global corporations into their global service centres in India, says Madhavi Lall, head HR, Deutsche Bank India. They expect to onboard a few hundred graduates and interns from the class of 2022 from across target institutes.

“We are actively hiring for digital skills, which constitutes the majority of our intake, and we are seeing a fair level of competition for talent in this space,” adds Lall.

The intense competition for talent in this space is not just pushing up salaries, but most firms are adding new campuses this year to the existing ones to expand their hiring pipeline.

Axis Bank has added campuses both in its MBA and engineering hiring programmes as the acceleration of its digital agenda and the strategic transformation of the organisation have also been an impetus. “This year, we are doubling down and increasing our hiring. As we rebound from the pandemic, business demand for talent has increased across both core and new age skills,” says head-HR Rajkamal Vempati.

In the coming year, Mastercard plans to hire around 500 graduates from the batch of 2022 under the Launchers program to fill roles in software development engineering, data engineering, analytics consulting, artificial intelligence and other areas. Campuses such as IIM Ahmedabad are seeing a surge in the number of companies. During the recent summer placements, there was an uptick of 27% in the number of companies that offer investment banking, market research and asset & wealth management roles compared to last year, said Ankur Sinha, chairperson of the placement committee.



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Citigroup to create 100 roles in digital asset push, BFSI News, ET BFSI

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– Citigroup is looking to create 100 roles focused on digital assets including blockchain and digital currencies at its institutional division, the U.S. bank said on Tuesday.

The intitiative is the latest by traditional banks looking to find ways to tap the growing cryptocurrency sector, which has been gaining mainstream appeal as well as regulatory scrutiny.

Puneet Singhvi, Citi’s head of blockchain and digital assets at its global markets operation, will lead the new team, Citi said in a memo to staff. The note was sent to the media.

The new team will comprise a mix of internal and external hires and be housed in Singapore, New York, London and Tel Aviv, a Citi spokesperson said in an emailed response, adding that the hiring is expected to finish by the end of 2022.

“Prior to offering any products and services, we are studying these markets, as well as the evolving regulatory landscape and associated risks, in order to meet our own regulatory frameworks and supervisory expectations,” the spokesperson said.

This year Bank of America started cryptocurrency research coverage, Goldman Sachs launched a crypto-trading team and JPMorgan Chase & Co allowed wealth management clients access to cryptocurrency funds, even though Jamie Dimon, its head, has been a vocal critic of the sector.

In Asia, DBS Group is expanding its cryptocurrency trading platform.

Citi’s new team will be involved in product development and project management while outlining strategy to pursue digital asset opportunities including new products, new clients and new investments.

(Reporting by Nikhil Kurian Nainan in Bengaluru; Editing by Anshuman Daga and David Goodman)



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How green is the green finance promise of global banks?, BFSI News, ET BFSI

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Most global banks have signed Gfanz (the Glasgow Financial Alliance for Net Zero) at COP26 UN Climate Change Conference pledging to report annually on the carbon emissions linked to the projects they lend to.

Major signatories to the initiative, which aims to provide trillions of dollars in green finance, include Citi, Morgan Stanley and Bank of America. However, earlier efforts to promote green financing have not met with a serious response.

Principles of responsible banking

In 2019, the UN General Assembly exuberantly launched its principles of responsible banking (PRBs) where signatory banks agreed to work with their clients to encourage sustainable practices and to align their business strategy to the UN sustainable development goals and the Paris climate agreement.

Also, many of the biggest banks have not signed the PRBs, even though the principles have been the gold standard until now for committing to decarbonising lending.

Of the top ten banks (by market capitalisation), only Citi, Commercial Bank of China (ICBC), Bank of China and Agricultural Bank of China are signatories to PRBs. JPMorgan Chase, Bank of America, China Construction Bank, Wells Fargo, Morgan Stanley and China Merchants Bank are not on the list.

This is despite it being a limited commitment. Signatories have four years to comply with the principles, and signatories are not penalised or even named and shamed for failing to live up to the principles.

How banks fare

Among the major signatories to PRBs, Citi was the third-biggest fossil fuel lender in 2016-19 after the Paris Agreement and reached second place in 2020.

MUFG and ICBC, who are also signatories to the PRBs, both grew their fossil-fuel lending over the period. MUFG is also a Gfanz member, though neither ICBC nor any of the other Chinese banks are part of the new initiative.

Meanwhile, Wells Fargo and JP Morgan, which were not signatories to PRBs, reduced their total fossil fuels lending each year from 2018 to 2020, by 57% and 23% respectively.

Signatories to the PRBs are also supposed to carry out environmental-impact assessments and to measure the greenhouse gas emissions of projects. They are also supposed to ensure that loans go to projects that are carbon neutral. However, very little of this is happening on the ground at present.

While there is a need for a scheme that makes PRBs compulsory and binding, Gfanz does not tick the boxes. Under it, annual reporting requirements on carbon emissions are not mandatory either.

Experts say instead of forbidding lending to non-green projects now, loan books need to be treated as a portfolio of projects in different hues of green, with a defined trajectory towards greener – but it needs to be mandatory for signatories.



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Credit card spends jump 60% in September, set for further festive push, BFSI News, ET BFSI

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Another option, if you are unable to make payments by the due date, is opting for a loan against your credit card. Various credit card companies offer pre-approved loans to customers, these can actually come in handy in this scenario. However, be mindful of the costs as the interest rate and other charges may be steeper. If you have multiple credit cards, compare interest rates and processing fees on each and go with the one that has least total cost for your preferred loan tenure.

Credit card spends jumped 60 per cent year-on-year (YoY) in September, helped by the onset of the festive season.

On a sequential basis, the growth slowed down to 3 per cent at Rs 80,500 crore, according to various research reports.

The festive season, opening up of the economy and rising consumer confidence is set to keep the credit card spends buoyant, experts say.

Kotak Mahindra Bank reported the highest growth (27% MoM) in September, followed by IndusInd Bank and ICICI Bank (13% each). Other major players reported growth in the +-4% range. On a two-year CAGR basis, spends for ICICI Bank grew 58%, IndusInd 33%, Kotak Mahindra Bank 29%. HDFC Bank and SBI Cards posted growth of 10–15% and Axis Bank and SCB 2–3%. While, Citi and Amex saw a decline of 8% and 26%, respectively. ICICI Bank surpassed SBI Cards to become the second-largest player in spends, with market share of 19.3% over 6MFY22.

Outstanding credit cards up 10.8%

The total number of outstanding credit cards in the system grew 10.8% YoY to 65 million in September 2021 – the highest in the past 11 months.

Among the major players, ICICI Bank reported strong growth of 26.1% YoY, followed by IndusInd Bank (15.6%), SBI Cards (14.3%). Foreign players such as American and Citi witnessed declines of 10% and 5% respectively. SBI Cards and ICICI Bank continued to perform strongly, resulting in a 59–218 bps YoY increase in market share to 19.3% and 18.0% respectively in September.

ICICI Bank added close to 2 million new cards in the past 10 months, taking its credit card base to 11.6 million as of September.

Despite a 247 bps year on year decline, HDFC Bank remained the largest player with a market share of 23.0%.

10.91 lakh card adds

Around 10.91 lakh new cards were added to the system in September with HDFC Bank being the largest acquirer at 2.44 lakh cards. ICICI Bank added 2.34 lakh, Axis Bank added 2.03 lakh, while SBI Cards added 1.75 lakh cards in September, while, Standard Chartered Bank, AMEX and Citi posted a decline of 13,000, 11,000 and 4,500, respectively, in the card base. IDFCF Bank also posted a strong performance with 39,000 new credit card additions in September.

Higher spends per card

Monthly spends per card for the industry increased to Rs 12400, from an average of Rs 10,700 over the past six months (higher v/s pre-Covid levels). This was attributable to an increase in the ticket size to Rs 4,300, the highest in the past several years.

Conversely, the number of transactions per card declined to 2.8 v/s 3.0 in August (3.1 in March). IndusInd and Kotak Mahindra Bank saw a higher increase of Rs 2,400 and Rs 2,200, respectively, followed by ICICI Bank with Rs 1,400.

IndusInd (Rs 9,700) and Amex (Rs 5,900) had the highest ticket sizes, followed by Kotak Mahindra Bank (Rs 5,100) and ICICI Bank (Rs4,900). All other players were in the range of Rs 3,900–Rs 4,300 – barring Citi and SCB, which were lower at Rs 3,000–3,200.



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Deutsche Bank ready to be NPS custodian for just Rs 100 per year, BFSI News, ET BFSI

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In an ultra-aggressive bid, Deutsche Bank is willing to accept a fee of just ₹100 a year for being the custodian of India’s pension fund which has total assets under custody of more than ₹6 lakh crore across various schemes.

The existing custodian, Stock Holding Corporation of India, a large depository participant owned by public financial institutions, charges close to ₹19 crore for the job.

Other institutions in the race for the custody mandate of the National Pension Scheme (NPS) include Citi, SBI-SG Global Securities Services (a joint venture between SBI and Societe Generale Securities Services), and ICICI. The fees quoted by these organisations are more than ₹1crore.

NPS, launched by the central government and involving multiple asset managers handling one of the largest fund pools in the country, is regulated by the Pension Fund Regulatory and Development Authority.

“It’s a prestigious mandate. So, Deutsche has probably taken a call to make money from a transitory float it could enjoy as a custodian,” said an official of a bank that has not put in a bid.

A Deutsche India spokesman said the bank would not comment on a client mandate.

“Beyond fees, there could be other ways to earn. Discount brokers charge little or nothing from stock traders. But, with so much liquidity available, earnings from float have come down with the fall in overnight rates. It may further shrink with T+1 (settlement in stock exchanges),” said an official of a financial intermediary.

A custodian has the opportunity to enjoy a day’s float by parking some money with the Reserve Bank of India under the reverse repo facility or in the inter-bank market.

Funds into NPS move from the employer (when salaries are paid) to the collection banks following which the money is transferred to custodians when an asset manager decides to invest in bonds and equities. Since investments happen within a day or two, custodians have a limited float.

The Deutsche bid has to pass the test laid down by the finance ministry.

According to the government’s ‘Manual for Procurement of Consultancy & Other Services’, “An abnormally Low bid is one in which the bid price, in combination with other elements of the bid, appears so low that it raises material concerns as to the capability of the bidder to perform the contract at the offered price. Procuring entity may in such cases seek written clarifications from the bidder, including detailed price analyses of its bid price in relation to scope, schedule, allocation of risks and responsibilities and any other requirements of the bid document. If, after evaluating the price analyses, (the) procuring entity determines that the bidder has substantially failed to demonstrate its capability to deliver the contract at the offered price, the procuring entity may reject the Bid/Proposal.”

Recently, a similar bid from another MNC bank for the custody mandate of postal life insurance was rejected on this ground.

While custody is a stable and sought after business, a few institutions have recently changed tack in choosing custodians. Life Insurance Corporation of India (LIC) recently shut the doors to foreign banks in selecting the custodian for its ₹10 lakh crore holding of stocks and corporate bonds. MNC banks lost out as LIC’s condition was that if the bidder was a foreign company or MNC, any of its securities had to be listed in India.



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Five banks may bid for Citi’s India consumer businesses, BFSI News, ET BFSI

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Five top lenders, including HDFC Bank and Kotak Mahindra Bank, are expected to submit binding bids for the Citi India consumer businesses before the October 26 deadline, two officials aware of the development told ET.

Axis Bank, IndusInd Bank and DBS India are also in contention for the businesses Citi is exiting in India. Although the US lender is seeking a valuation in excess of $2 billion, the bids could be more circumspect after Citi lost significant market share in its retail and credit card books, one of the executives cited above said.

HDFC Bank and Kotak Mahindra Bank, two of India’s top three most valued private sector lenders, are considered front-runners to win the business that generates about $1 billion in revenue.
“While Citi’s retail franchise remains excellent, the book has shrunk. It has lost significant market share and due to the exit plans, it has not been able to focus on enhancing the existing book and adding quality customers,” said an official involved in the bidding process.

“Still, Citi has received multiple bids from domestic banks. Plus, it is also expected to receive bids from global suitors that may be looking to pick up consumer assets in several markets the bank has exited,” the official said.

Citi India said it has received strong interest from bidders.

“We are pursuing consumer franchise sales with a focus on optimising results for our people, our clients and our shareholders,” a spokesperson for Citi India said in a mailed response to ET’s queries. “Conversations with potential buyers continue in these markets, including India, with strong interest from a broad range of bidders.”

HDFC Bank, Kotak Mahindra Bank, DBS India, Axis Bank and IndusInd Bank did not respond to ET’s mailed query.

Citibank, under its first woman CEO Jane Fraser, decided to exit retail businesses in 13 markets to conserve capital and focus on higher yielding revenue streams. The Citi management has indicated that the exit process is currently on and that while it will look to complete the exits in a timely manner, the retreats wouldn’t be anything akin to so-called fire sales.

Citi’s consumer portfolio contributes about a third to the India business on profitability while the total India business contributes 1.5% in profits to the lender’s global book.

The Indian retail basket includes credit cards, deposit accounts, wealth management and a mortgage portfolio. Overall, Citibank’s India unit had a market share of advances and deposits of 0.6% and 1.1%, respectively. In India, Citibank has more than 2.5 million retail customers, 1.2 million bank accounts and nearly 2.6 million credit cards. It lost more than 100,000 customers since announcing its exit.

The Right Mix
Although Citi is India’s sixth-largest card issuer, it has lost market share on card spends – from 20% a decade ago to 4% now. However, it has consistently logged 15-25% higher expenditure per card against the industry average, an analysis by Macquarie showed. A mix of premium cards and corporate salary account cards in the portfolio makes the Citi business attractive for bidders. “We have done due diligence on the book; it’s a good franchise for banks that don’t have an existing credit card or wealth book and it only makes sense at a good valuation. We will have to see how aggressively we bid,” said a top official at a bank that is likely to submit its bid.



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Advisory fees of investment bankers drops to 3-year low at $761 million, BFSI News, ET BFSI

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Advisory fees of investment bankers have fallen $761.5 million, the lowest in three years, said a report by Refinitiv, an entity owned by the London Stock Exchange.

During the first nine months of 2021, SBI Caps led the underwriting fees league table with 8.6 percent wallet share or $65.7 million. Morgan Stanley comes next with 6.3 percent with $48.1 million, followed by JPMorgan at 6.2 percent with $47.5 million.

Goldman Sachs stood at fourth with $46.7 million or 6.1 percent of the market pie. Axis Bank got $46.7 million or 6.1 percent share, while ICICI Bank had $40.4 million, 5.3 percent.

BofA Securities got $33.5 million for a 4.4 percent deal share, Kotak Mahindra Bank at $32.8 million, 4.3 percent, Citi at USD 29.1 million, 3.8 per cent, and Avendus Capital stood at the 10th place with $23.3 million for a 3.1 percent deal share.

ICICI Bank leads with $2.5 billion, 11.3 percent of the market share in ECM league table.

Since the deal making process is online, the i-banking fees have dropped as merchant bankers are charging less from their clients. Another reason for the drop is the higher average deal value size of $105 million, which was up 14.4 percent year-on-year with 17 deals topping the $1-billion mark and totalling $38.8 billion, compared with 12 deals above $1 billion worth a total of $30.1 billion on a year-on-year basis.



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HDFC Bank, Paytm set to launch co-branded credit cards in Oct, BFSI News, ET BFSI

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HDFC Bank and Paytm have entered into a partnership to launch a range of credit cards, powered by global card network Visa.

The launch is planned for next month, amid the the festive season, to tap into potentially higher consumer demand for credit card offers, EMIs and Buy Now Pay Later options. The full suite of products will be on offer by the end of December, the companies said in a joint press release.

The launch will mainly target millennials, business owners and merchants, and will introduce business credit cards for merchant partners from smaller cities.

The cards will be customised to meet demands of retail customers, from new-to-credit users to affluent users, and offer rewards and cashback, it said.

Paytm has a reach of over 330 million consumers and 21 million merchants, while HDFC Bank has over 5 million debit, credit and prepaid cards, and serves 2 million merchants through its offerings.

This development comes after the Reserve Bank of India lifted its new credit card issuance ban on HDFC Bank, which was imposed for over eight months as a penalty for frequent technical glitches. After the ban was lifted, the bank said it will ‘come back with a bang’, and has aggressive plans to regain lost market share.

Currently, Paytm has a tie-up with global lender Citi, under which co-branded credit cards are issued.



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Buying Citi assets can be a game-changer for Kotak, IndusInd faces constraints, BFSI News, ET BFSI

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The retail and credit card business put on the block by Citibank India are best fit for Kotak Mahindra Bank and DBS Bank, while for HDFC Bank it is still a good asset though not a game-changer, according to CLSA.

The brokerage house had estimated the value of Citi‘s business in India at $2-2.5 billion.

HDFC Bank, Kotak Mahindra Bank, Axis Bank, IndusInd Bank and DBS Bank have emerged as the top five contenders to take over Citi India’s retail business that includes, credit cards, mortgages, wealth management and deposits. The race will be narrowed down to three, with whom Citi would negotiate a higher value.

How they stack up

While IndusInd Bank has the size and valuation constraints to acquire such an asset, the operations can be a game changer for Kotak Mahindra Bank because it can add 20% to the bank’s current retail loans, it said. “For Kotak Bank, the business adds 20% to its current retail book and increases its card segment by 3x (times),” the brokerage said in a note. “It is also complementary to its affluent customer base and Kotak Bank’s premium valuation will aid it in a purchase.”

It said Citibank’s affluent retail business also fits well with DBS Bank India’s premium offerings and banking relationships. DBS Bank does not have a credit card business in India.

For HDFC Bank, the acquisition won’t be a game changer as it is only nearly 6% of the lender’s total book, it said, while for Axis it will be a valuable acquisition, but valuations would be constrained, it said.

What’s on offer?
Citi’s total assets In India at the end of FY20, including credit extended to Indian institutional clients from offshore Citi entities, stood at Rs 2.99 crore.

The consumer banking business, which includes cards and loans against property, would be around Rs 32,000 crore. It also has a huge amount of savings accounts built over the last few years, which has a lucrative liability book and also credit cards, in which it was the largest among foreign banks in India.

The bank also had Rs 27,911 crore of loans to agriculture, affordable housing renewable energy and micro, small and medium enterprises (MSMEs). Of this, Rs 4,975 crore was to weaker sections, as part of Citi India’s priority sector lending obligations, results released last year showed.

Citi Bank has 2.8 million retail customers, 1.2 million bank accounts and nearly 2.6 million credit cards as of June.

Citi’s consumer business contributes about a third to the overall India business in terms of profitability, while total India business contributes 1.5% of profits to the global book. Overall, Citibank’s India unit had a market share of advances and deposits of 0.6% and 1.1%, respectively.

Citi credit cards
Buying Citi assets can be a game-changer for Kotak, IndusInd faces constraints

Citi started retail operations in India in 1985 and was among the pioneers of credit cards in the country. However, its share of credit cards has dropped from 13% to 6% now. Despite being the sixth-largest player in the space, Citi has the highest average spend on its card touching close to 2 lakh per card. The average spends per card for Citi is 1.4 times higher than the industry average, making it a profitable business for the bank in India. The other four major players have had nearly the same steady growth in spend per card at 11-12%.

Citibank’s outstanding credit cards as of February stood at 2.65 million, the largest among foreign banks in India, ahead of 1.46 million by Standard Chartered and 1.56 million by Amex. Citi India had 2.9 million retail customers with 1.2 million bank accounts as of March 2020.

At the end of March 2020, Citibank served 2.9 million retail customers with 1.2 million bank accounts and 2.2 million credit card accounts.



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MOVES-Goldman hires Citi banker as co-head of investment banking in MENA

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DUBAI, Sept 5 – Goldman Sachs has hired senior Citigroup banker Jassim AlSane as its co-head of investment banking in the Middle East and North Africa region, according to two sources familiar with the matter.

AlSane, a Kuwaiti national, has spent 13 years with Citi where he has most recently been managing director in its investment banking unit, focusing on mostly Abu Dhabi and Kuwait, one of the sources said.

Goldman has also hired Omar AlZaim from HSBC as head of investment banking for Saudi Arabia, one of the sources said.

Goldman Sachs and HSBC did not immediately respond to requests for comment. Citi declined to comment.

Bloomberg reported the news of the appointments earlier on Sunday.

Goldman Sachs has been pushing to win deals in Saudi Arabia and Abu Dhabi, where initial public offerings (IPOs) and mergers and acquisitions are on the up.

It landed a lead role https://www.reuters.com/world/middle-east/abu-dhabis-adnoc-adds-goldman-sachs-lead-banks-drilling-ipo-sources-2021-07-01 in the IPO of ADNOC’s drilling unit, sources said in July, in it first such high-profile deal in the emirate since 2019.

Goldman’s investment banking unit was sidelined from any new business from Abu Dhabi more than two years ago after state fund Mubadala’s subsidiary filed a lawsuit against it to recover losses suffered through its dealings with Malaysia’s fund 1MDB.

The lawsuit was dropped last year.

In Saudi Arabia, Goldman is advising on the sale of Saudi Aramco’s gas pipelines stake sale and previously worked on Aramco’s IPO. (Reporting by Davide Barbuscia and Saeed Azhar; Editing by Pravin Char)



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