Citicorp Finance reworking business strategy to focus on corporate lending

Citicorp Finance (India) (CFIL) is reworking its business strategy to focus on corporate lending in the country. This follows Citigroup’s decision to exit consumer finance in India.

Besides corporate loans, which have a 13 per cent share in its asset books, CFIL continues to offer other institutional lending products.

Rating agency CRISIL, while reviewing CFIL, said the company will continue to play a strategic role in India and complement Citigroup’s suite of offerings. It affirmed its ‘AAA’ rating on the bank facilities of CFIL.

The ratings factor in the comfortable capitalisation of CFIL, supported by low non-performing assets (NPAs) and its diversified resource profile. It also takes into account the expectation of strong support from parent Citibank N.A.

Banking sources said Citigroup is in an advanced stage to sell its consumer business unit in India.

The rating agency said a recent global strategic review has impacted the consumer financing business of CFIL, which comprises asset-backed finance and personal loans. These constituted around 38 per cent of the asset book (loans plus investment in debentures) of Rs 8,318 crore as on March 31, 2021.

In addition, CFIL also offers loan against securities (LAS) under the Margin Security-Backed Finance (MSBF) segment.

Since the exit announcement, Citicorp Finance has steadily run down the personal loans and LAS book while increasing disbursements of corporate loans. 

As on September 30, 2021, CFIL’s asset book stood at Rs 6,447 crore with Rs 34 per cent comprising corporate loans and 17 per cent investments in debentures.