Why Citi’s India retail exit is paying off as institutional asset book crosses ₹1 lakh crore

Citibank N.A. India’s decision to exit consumer banking and sharpen its focus on institutional clients is beginning to show results, with its institutional asset book crossing ₹1 lakh crore, nearly doubling from about ₹53,000 crore since the consumer business was sold to Axis Bank in March 2023.

The strategic shift was part of Citi’s broader global restructuring under CEO Jane Fraser, who announced plans in 2021 to exit consumer banking in 13 markets and redirect capital towards the bank’s institutional franchise. In India, the transaction with Axis Bank covered credit cards, retail banking, wealth management and consumer loans, while Citi retained its institutional and corporate banking operations.

Capital redeployed to institutional banking

According to Jeegar Shah, Chief Financial Officer, Citi India, the bank has deliberately redirected resources towards areas where it sees greater competitive strength. “As envisaged under the strategy refresh, following the divestiture of our consumer banking business in March 2023, we have redeployed capital and resources to support growth in our core institutional business,” Shah told Business Standard.

The results have been significant. Citi added around ₹24,000 crore to its institutional asset book in the last 12 months, representing a 30% increase. The bank attributed the growth to increased capital investment, expanding trade flows and sustained financing demand across key sectors.

Shah said the institutional asset book has nearly doubled since the strategy refresh, with about 60% of the growth coming from loans, including trade and corporate lending. The remaining growth has come from structured products such as securitisation, commercial paper and corporate bonds.

Institutional business

Citi’s institutional franchise serves Indian corporates, multinational companies, financial institutions and commercial banking clients. Its offerings span working-capital finance, trade and supply-chain finance and structured financing.

The bank’s structured-products business has also expanded sharply, growing nearly fivefold since the consumer-business exit. This indicates that Citi’s post-retail strategy is not simply about replacing consumer loans with conventional corporate lending, but about expanding its broader institutional-finance platform.

“There was zero doubt in any of our management’s minds that the strategy refresh would be accretive to us. We doubled down on institutional business where we deliver sustained competitive differentiation and create meaningful value for our clients,” Shah told Business Standard.

A different path for foreign banks

Citi’s strategy contrasts with the approach of several other foreign banks that have scaled back their retail presence in India. Standard Chartered has sold its personal loans business to Kotak Mahindra Bank and its retail credit card portfolio to Federal Bank, while Deutsche Bank sold its retail banking, affluent private banking and wealth management businesses in India to Kotak Mahindra Bank.

For Citi, however, the India strategy has been less about retreat and more about repositioning. By exiting a capital-intensive consumer franchise and concentrating on institutional banking, the bank is betting that India’s growing corporate activity, trade flows and financing requirements can generate stronger long-term returns.