Citi On Friday said that its Indian consumer finance operations have pushed up its credit costs in Asia as net credit losses, or the monetised value of bad debt, increased during the first quarter ended March 2009.
In its first-quarter earnings review, Citi estimated its total net credit losses (NCL) from the international consumer credit business – comprising cards and consumer banking – at $1.7 billion compared with $1.8 billion at the end of the December quarter.
Of this, India’s share in the first quarter NCL is estimated at 8 per cent, or $136 million (Rs 680 crore), as against 7.8 per cent, or $124.8 million (around Rs 610 crore) in the previous quarter.
The NCL ratio for the India business is estimated at 7.1 per cent as against 6.3 per cent in the fourth quarter of 2008. In contrast, in Asia – excluding Japan – the net credit losses ratio from the consumer finance business is estimated at 1.79 per cent.
Delinquency levels have shot up in India and banks such as Citi and its non-banking finance company Citi Financial have seen a higher increase in bad debt, forcing them to significantly scale down operations in the country.
On a quarter-on-quarter basis, Citi said that there was a 7.8 per cent rise in net credit losses during January-March for the Indian consumer finance operations.
In terms of contribution to Citi’s consumer credit business, based on annualised net revenues ($129.5 billion), India ranked sixth with a share of 6.4 per cent, or $7.8 billion (around Rs 39,000 crore) in the ANR, which was roughly the same level as the last quarter.
This meant that India’s share went up by 40 basis points during the first quarter despite the ANR not rising.
