 "Citibank India focuses on instant loans to grow its retail book")
Citibank India, the country’s most profitable foreign lender in the country, is focusing on instant disbursal of loans to cross-sell at a fast pace and grow its retail (individual borrowers) book. After launching instant personal loans a couple of quarters ago, the lender has launched instant mortgage loans and instant credit cards for existing customers.
Banks have been increasingly looking at online disbursal of loans to expand their retail book.
“My focus on cross-sell allows me to incrementally expand, but digitisation provides a much faster scale of expansion because we are reaching the customer at a faster pace. Earlier, there would be piecemeal automation of a process, either at the approval or documentation stage, which would eliminate certain manual steps. Now we are making the whole process instant,” said Kartik Kaushik, country business manager-retail and commercial banking.
Like other lenders, Citibank is keeping its instant loan offering for existing customers.
However, the online mortgage loan that was launched in the quarter ended June is only available for pre-approved properties. The lender says online disbursal of personal loans, which was launched in the quarter ended December, is beginning to show good traction.
“In a matter of only six months of launch, a quarter of personal loan origination is happening through our instant personal loan product service,” said Kaushik
This is in line with the overall strategy to gradually digitise all offerings, end to end. In fact, all over Asia, the lender said 95 per cent of all its transactions already happen outside a branch.
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Apart from this, the online medium is now increasingly being used as an acquisition tool and in Asia, one of every five new credit card accounts acquired comes from digital sources. Within India, one-third of the bank’s customers are said to be acquired via the digital medium.
However, in the past financial year, Citibank India’s performance came under pressure. The lender posted a five per cent drop in net profit for the financial year ended March. Profit after tax stood at Rs 3,233 crore in FY16 versus Rs 3,423 crore the previous financial year. The pressure on the book is believed to have surfaced from the corporate end and the retail book of the bank is believed to have witnessed steady growth. “Growth in consumer business has been steady. The retail book CAGR (compound annual growth rate) is in healthy double-digits and it continues to remain so,” Kaushik said.
