Citibank has become the first foreign lender in the country to generate profits in excess of Rs 2,000 crore. The Indian operations of the troubled US bank clocked a 20% rise in net profit after tax to Rs 2,173 crore for FY09 (April-March), up from Rs 1,804 crore in the previous fiscal, on the back of a sharp rise in fee income and lower expenses.
Internationally, Citigroup reported five quarters of consecutive losses, totalling $28 billion from the fourth quarter of 2007 to the Q4 of 2008. In the first quarter of the current calendar year, it made a profit of $1.6 billion on trading gains. Emerging markets like Asia-Pacific have been the growth engine for the bank, even as its core US market is reeling from under the impact of the subprime crisis.
Citi has ploughed back profits into its Indian operations and grown its capital base to Rs 11,518 crore. With this profit, Citi's Indian operations rank at number seven among local banks in terms of net profit.
What makes Citi's profit exceptional is that the American bank has only 40 branches across the country. Some of Citi’s Indian rivals have more branches in metros like Mumbai alone.
The profit drivers for Citi have been treasury and corporate banking. For all the delinquency-related problems in personal loans and credit cards, Citi continues to have a profitable retail business. "Recognising the credit quality challenges we faced in our unsecured consumer loan portfolio, we were among the first in the industry to take corrective action and are pleased with our progress," said Citi South Asia CEO Mark T Robinson.
The bank’s branch banking business, Citi Gold — its offering for HNIs and mortgage business — has been profitable. Corporate banking revenue rose by 15% to Rs 3,029 crore, treasury 61% to Rs 3,293 crore while retail banking revenues rose 12% to Rs 4,005 crore. On a conglomerate basis, some of the NBFCs like Citigroup Global Market, Citicorp Finance, Citicorp Clearing Services and Citicorp Capital Markets have logged higher profits than last fiscal while Citi Financial, the group’s consumer finance arm, has reported a loss.
In the last fiscal, on a conglomerate basis, the net profit of the group was at Rs 2,596 crore. This year, however, the conglomerate profit would be lower. The group has not given the break-up in profit for any of the NBFCs.
In FY09, the bank's balance sheet grew 25% to Rs 105,264 crore. One of the profit drivers was the 46% rise in non-interest income to Rs 3,582 crore. Interest income grew 15% to Rs 6,840 crore. Advances of the bank grew by only 4% to Rs 39,920 crore while deposits grew 15% to Rs 51,677 crore.
Internationally, Citigroup reported five quarters of consecutive losses, totalling $28 billion from the fourth quarter of 2007 to the Q4 of 2008. In the first quarter of the current calendar year, it made a profit of $1.6 billion on trading gains. Emerging markets like Asia-Pacific have been the growth engine for the bank, even as its core US market is reeling from under the impact of the subprime crisis.
Citi has ploughed back profits into its Indian operations and grown its capital base to Rs 11,518 crore. With this profit, Citi's Indian operations rank at number seven among local banks in terms of net profit.
What makes Citi's profit exceptional is that the American bank has only 40 branches across the country. Some of Citi’s Indian rivals have more branches in metros like Mumbai alone.
The profit drivers for Citi have been treasury and corporate banking. For all the delinquency-related problems in personal loans and credit cards, Citi continues to have a profitable retail business. "Recognising the credit quality challenges we faced in our unsecured consumer loan portfolio, we were among the first in the industry to take corrective action and are pleased with our progress," said Citi South Asia CEO Mark T Robinson.
The bank’s branch banking business, Citi Gold — its offering for HNIs and mortgage business — has been profitable. Corporate banking revenue rose by 15% to Rs 3,029 crore, treasury 61% to Rs 3,293 crore while retail banking revenues rose 12% to Rs 4,005 crore. On a conglomerate basis, some of the NBFCs like Citigroup Global Market, Citicorp Finance, Citicorp Clearing Services and Citicorp Capital Markets have logged higher profits than last fiscal while Citi Financial, the group’s consumer finance arm, has reported a loss.
In the last fiscal, on a conglomerate basis, the net profit of the group was at Rs 2,596 crore. This year, however, the conglomerate profit would be lower. The group has not given the break-up in profit for any of the NBFCs.
In FY09, the bank's balance sheet grew 25% to Rs 105,264 crore. One of the profit drivers was the 46% rise in non-interest income to Rs 3,582 crore. Interest income grew 15% to Rs 6,840 crore. Advances of the bank grew by only 4% to Rs 39,920 crore while deposits grew 15% to Rs 51,677 crore.
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