Citi bifurcates commercial banking business

Citibank today announced an organisational restructuring by bifurcating its commercial banking business in India into asset-backed financing (ABF) business and small and medium enterprises (SMEs) unit. It named Rohit Ranjan as the head of its ABF business in India. Sandeep Ghosh continues to head the SME unit.

Ranjan was national sales head for commercial vehicle financing prior to the new assignment. He joined Citigroup in 1998 in the ABF business as regional sales head for the northern region.

Both Ranjan and Ghosh will now directly report to Citigroup India's chief executive officer Sanjay Nayar.

Citibank's ABF business has loan assets of nearly Rs 3,300 crore and SME business has assets worth over Rs 4,300 crore.

The decision to separate ABF and SME businesses was prompted by an increase in the number of services under the respective businesses. The top end of the SMEs now even ask for merger and acquisition advisory services and foreign exchange products.

Citibank said the creation of separate ABF business unit provides a renewed focus as newer asset classes get added.

"The ABF unit will go beyond truck financing. It will now get into equipment financing in a big way. We are also looking into new asset classes such as medical equipment and printing machines, etc," Nayar told Business Standard.

The bank's SEM business will not take a horizontal approach by focussing on small manufacturers.

"It is more like a community banking. So far, we were focussing on exporters and readymade garment manufacturers. Now we will go to dealers and small manufacturers," he said. The SME business has about 3,000 clients.

The Citigroup's SME business employs over 400 people in frontline sales, marketing and risk management functions.

Nayar said, "India continues to offer vast opportunities in the transportation and infrastructure equipment financing. Citibank is also ideally poised to capitalise on opportunities in new asset classes such as printing equipment and medical equipment."

Citibank's cash management services are utilised by over 900 corporates and the throughput totals around $25 billion, which is about 6 per cent of the India's gross domestic product (GDP).

Citibank is also the largest foreign bank in the foreign exchange market with an eight per cent market share and is also the leading custodian with over $13 billion of custody assets under management.