Citibank net profit up 17.58% to Rs 705.5 crore in 2005-06

Citibank India has maintained its second position among foreign banks in terms of profitability, as it today reported a 17.58 per rise in net profit to Rs 705.5 crore in 2005-06.

The largest foreign bank, Standard Chartered Bank, had earlier said its net profit in 2005-06 was Rs 905.9 crore, which keeps it ahead of all the foreign banks in terms of profitability.

Hong Kong and Shanghai Banking Corporation remains at the third spot with a net profit of Rs 514.9 crore in 2005-06.

Citibank's total 2005-06 income at Rs 4,107.4 crore is the highest among the foreign banks. Although Standard Chartered follows with a total income of Rs 3,877 crore, its lead in terms of net profit shows that it enjoyed a higher profit margin.

The US-based Citigroup's combined India operations, including Citibank and consumer lending arm Citifinancial, reported its aggregate net profit for 2005-06 in India at Rs 3,297 crore against Rs 940 crore a year earlier.

The net profit in 2005-06 was higher because of Rs 2,188 crore gain on sale of its stake in software solutions provider, i-flex solutions. A stake in i-flex of 43 per cent was sold for Rs 2,464.

Across the corporate and consumer businesses, strong customer business growth was driven by an increase in the number of customers as well as by broadening relationships with existing customers. Buoyancy in the capital markets and overall economic growth also resulted in strong earnings momentum.

The combined revenue of all the group's entities in the country grew to Rs 7,735 crore from Rs 3,957 crore, mostly because of the i-flex stake sale. The revenue growth was also driven by rise in net interest margin and fee-based income.

Sanjay Nayar, CEO, Citigroup India and area head, Sri Lanka, Bangladesh and Nepal, said, "We are very pleased with another year of steady growth and continuing momentum across our franchise. By leveraging the strengths of our unique global business platform, we have achieved a strong business trajectory despite competitive market conditions."

The group increased the capital by approximately Rs 2,000 crore through the infusion of new capital and the retention of new earnings. Citigroup became the first foreign player to set up an ECM (equity capital markets) desk in India offering equities, research, banking and retail IPO distribution.

The group also launched a venture lending programme and distressed asset recovery division and a one-stop shop for the increasing number of Indian companies exploring global opportunities.