 "Citi shutting down its retail broking biz")
Citibank India, the most profitable foreign lender in the country, has decided to shut its retail broking business in India. In an email sent to clients, the lender said the retail brokerage trading account would be shut down with effect from April 15. "We thank you for your patronage and would like to bring to your attention an important change to your brokerage account (account number) with Citi Wealth Advisors, a division of Citigroup Global Markets India Pvt Ltd. We are discontinuing brokerage services, which means that you will no longer be able to operate this account after April 15, 2016," the email said.
A communication regarding the client's Demat account with Citi Wealth Advisors would be sent to them shortly, the email added. People familiar with the development said the Demat account would be moved to the bank.
According to sources, Citibank took this decision despite having a large customer base, with most of the clients only availing the wealth management business which is the bank's key proposition. As a result there were only about 2,500 active retail trading accounts with Citi. A broking account is classified as an active account if it has been operated at least once a year.
Despite having a large customer base, only a few clients traded through their Citibank broking account as its commissions were higher than other domestic brokerages, which charge around 0.25-0.75 per cent of the trade value.
Citibank's move comes at a time when several other foreign lenders have been going through a process of restructuring in the country. Last year, Standard Chartered Bank decided to shut its securities and equity broking business in India. This was also a part of StanChart's move to cut down its non-core or underperforming businesses. Recently, even Barclays shut down its cash equities division in India.
In FY15, Citibank reported an 18.3 per cent rise in net profit from its India operations at Rs 3,423 crore from Rs 2,893 crore in FY14.
