Mumbai: On 1 February, Mark Robinson, a 24-year Citi veteran, will formally take over the reins of Citibank NA’s Indian unit from Sanjay Nayar. Robinson will be the first foreign-origin CEO of Citi India in nine years, but he and Nayar come from a similar background—at least in terms of their experience at Citi. Robinson, who joined the bank in late 1984, a few months before Nayar, has a clear message for the peer banks, colleagues, customers and shareholders of Citi: “It just doesn’t matter what passport you carry; this business is important and Citibank will continue to grow its balance sheet in India.’’
According to Nayar, who is set to join US-based private equity firm Kohlberg Kravis Roberts and Co. as CEO and country head in India, Citi is more Indian than many local private banks. “We have not repatriated profits to our parent for years but these banks have been giving dividends to their foreign stakeholders, who hold 70% stake or even more, every year,” Nayar said.
Sharing experience: Mark Robinson (left) with the outgoing CEO Sanjay Nayar at the Citibank India headquarters in Mumbai on Thursday. Abhijit Bhatlekar / Mint
Mint spoke to Robinson and Nayar on the bank’s future here. Edited excerpts:
You seem to have come up with a clear mandate to take some tough decisions, including retrenching people.
Robinson: I am not chosen to conduct major cost-cutting exercise. When Sanjay said he wants to move on to pursue opportunities (elsewhere), the firm went through a list of names of the possible candidates, based on their work experience... I had to go and meet Vikram (Pandit) and board members. Our selection (process) is most transparent and a candidate is selected only if the individual has the characteristics to lead the business.
When our shareholders look at our long-term growth prospects, they prioritize some product areas, customers segments and geographies. India figures high in that list in terms of Citi’s growth prospects. Regardless of my profile, the mandate I have got from Vikram and Banga (Ajay Banga, Citigroup Asia Pacific CEO) is to grow the India business that Sanjay and his team have built. India is a valuable part of Citi’s business globally and it accounts for disproportionate part of our growth prospects. My mandate is to grow the business in a balanced way.
Sanjay, what’s the one thing you told Robinson about the Indian market?
Nayar: We have spent a lot of time together in office, met our management team and various stakeholders, regulators, government and clients. Mark came to India in November and has been around since then. India is an economy which will post a minimum 6% growth—that’s the message coming out from our client meetings and other interactions. Citi is well positioned as a universal bank in terms of both product offerings and customer segments. The business momentum here is very high and intact even though the composition of the momentum might have changed. For instance, we have slowed down in personal loans and credit cards, but businesses related to capital markets, transaction banking, wealth management, etc. are doing very well. Diversity of business is helping us despite slowing down in economic activities.
Citi is well positioned as a strong Indian bank in this country. Let Mark take it from here... He has been a country manager in Turkey, Hungary and Russia...
You are a local bank?
Robinson: Yes, indeed, we are a local bank. We have been here for 107 years... We employ more than 8,000 people. We are also a massive exporter of talent. We continue to invest in the country and do not send money out.
Where do you see opportunities?
Nayar: Opportunity of growth is still there. Mark and I spent time in Bangalore on customer calls and found that for every customer we can do a lot more. Every time we stepped out of a call, we added more things to the list that we can do. There’s so much going on all around. We are committed to lend and taking risk and servicing our clients. We have not stopped any business.
Do you agree?
Robinson: I completely agree with Sanjay that there is no lack of growth opportunity in India. I believe that financial sector is not playing a full role in the development of the Indian economy. We can also help in the development play.
Having worked in various countries, it is very tempting for me to make comparisons. The business that we have here is 107 years old. The number of customers we have in India and our presence in so many cities have made India truly one of Citi’s top business centres anywhere in the world. I am excited to work in India.
Globally, Citi has split the group into two business units—Citicorp and Citi Holdings. What’s the impact on India?
Robinson: The announcement of restructuring Citi’s business into Citicorp and Citi Holdings will have no material impact in India. India, in fact, is already a model for universal bank. Our consumer finance business will fall under Citi Holdings but this will not change the way we run the business.
Nayar: It has no impact in India. The restructuring was only to tell the people where our management focus lies.
Won’t you be looking to sell CitiFinancial, the consumer finance arm, which is now part of Citi Holdings?
Robinson: All businesses under Citi Holdings—the retail brokerage, consumer finance, asset management and others—are run for value. Over time, there are many ways to gain value. You can create value through outright sale or partnerships.
The consumer finance business in India is a part of the global Citi business and there could be some partnership globally which could have implications for India. In the meantime, we run the business as usual by improving credit writing skills, people and risk management practices.
Nayar: If ever there was a global sale of the consumer finance business... I don’t know if there is any buyer in this market. However, if we were to do that any time, we are ready (for it)..
What about your stake in Housing Development Finance Corp. Ltd?
Nayar: Our HDFC stake is part of Citicorp. Right now, it is a strategic holding.
Citi’s global earnings reflect higher credit costs in Asia, primarily on account of deterioration in asset quality in Indian consumer business. Your comment.
Nayar: The Indian consumer finance business is facing rough weather. The global numbers do not catch the latest trend. It’s improving. We are taking steps such as resegmentation of customers, tightening underwriting norms, stepping up collection activity, shutting down not profitable branches. In fact, we have brought down the number of branches to about 125 from more than 200. There is improvement in the consumer finance area. In credit cards, still we have to do some work. Give Mark two more quarters and things will look much better. It’s work in progress.
You have exited the auto loan segment. Will you stop issuing credit cards too?
Robinson: We have no plans of exiting this business; we are just going slow. Credit cards is a global product line and we are a leading player in the country.
With your global balance sheet deep in the red, the parent will not be able to infuse capital in Indian operations any more. Won’t that affect your business?
Robinson: The biggest source of capital for us is our local earnings. As an Indian bank, we make money here and reinvest here.
Nayar: In December, we got $200 million (Rs978 crore) for CitiFinancial as it needed capital. So, when there is a need, the parent will always step in. We generate sufficient profit to take care and grow Indian business.