Citi India will continue to focus on servicing large local corporates and multinationals, Ashu Khullar, its CEO, says in an interaction with Shashank Didmishe. The foreign lender completed the sale of its retail consumer business to Axis Bank last month. Excerpts:
What is your outlook on credit growth for next fiscal?
Structural policy initiatives, competitive corporate tax rates, relocation of global value chains, conducive investment climate and rise in capacity utilisation rates are expected to boost capex. From Citi’s perspective, we expect good credit growth over the next fiscal and have a good level of liquidity to be able to support clients. The overall credit growth can potentially be in the range of 12-14%.
What will be the impact of the global recession on the Indian economy?
We envision a “less hard” landing than previously anticipated for the global economy in 2023 with our economists opting for a small upgrade to their global growth forecasts recently. India has one of the lowest beta to global growth slowdowns among Asian economies.
The domestic drivers of growth remain resilient as high frequency data is showing only signs of limited weakness. Along with public capex push, some revival in private investment and stabilisation in rural economy could help cushion the impact of global weakness on the Indian economy.
What will be the focus area of the bank after the completion of sale of the consumer business to Axis Bank?
Citi is focused on servicing large local corporates, multinationals, financial institutions and emerging and mid-sized corporate clients — all key to India’s economic development and ambitions. Being present in 95 countries, we bring globality in respect to our talent and knowledge base, as well as our products and services. With rebalance in global supply chains, growing digital ecosystem and global dynamics, clients with global linkages or aspirations need a bank with an on-ground presence for long-term financing, cash management and volatility protection against rate increases. We are well-entrenched in India — we bank 30% of MNCs in India and 45% of the country’s unicorns. At a global level for Citi, India is an incredible case study of how our businesses —markets, services and banking — support clients. We have 30% market share of FPI flows, 8% of trade flows and ~4.5% of electronic payment flows. Over two decades, our investment banking team advised clients with episodic business, including capital raising and M&A worth ~$500 billion.
What is the technology spending of the bank at India level?
Citi continues to invest in technology and digital capabilities — this is a strategic priority for the firm globally and in India. We offer market-leading digital platforms for clients across the entire product suite. A very high portion of transactions originate digitally. We are also adopting emerging technologies to enhance platforms. Citi leverages India as a globally strategic hub for technology talent, employing over 13,000 technologists across five Citi Solutions Centres that support the firm’s global footprint across businesses and geographies. We hire engineers from top colleges across India and consistently invest in skilling our talent through a comprehensive suite of learning and certification programmes.
How are you supporting clients on their ESG portfolio?
Citi worldwide is extensively focused on the concept of environmental, social and governance activities. Each year, at a global level, Citi reports its ESG activities and performance. In 2021, Citi committed to $1 trillion in sustainable finance by 2030, including $500 billion in environmental finance and $500 billion for social finance. We unveiled an initial plan to reach net zero emissions by 2050, including 2030 targets for our energy and power loans portfolios. In 2021, Citi issued a first-of-its-kind $1 billion social finance bond to expand access to essential services in emerging markets and committed to aim to invest in opportunities for 15 million low-income households, including 10 million women, globally by 2025. For India, as a global bank, it’s important we bring investors opportunities for clean energy, renewables, technology, amongst others. For example, we’ve led multiple bonds in the ESG format amounting to more than $7.4 billion since 2015. At the same time, we recognise the on-ground needs and see a lot of opportunities towards social credit.