Active Stocks
Thu Mar 28 2024 15:59:33
  1. Tata Steel share price
  2. 155.90 2.00%
  1. ICICI Bank share price
  2. 1,095.75 1.08%
  1. HDFC Bank share price
  2. 1,448.20 0.52%
  1. ITC share price
  2. 428.55 0.13%
  1. Power Grid Corporation Of India share price
  2. 277.05 2.21%
Business News/ Home-page / ‘Job cuts at Citi won’t impact India too much’
BackBack

‘Job cuts at Citi won’t impact India too much’

‘Job cuts at Citi won’t impact India too much’

Moving on: Citi’s Sanjay Nayar. Abhijit Bhatlekar / MintPremium

Moving on: Citi’s Sanjay Nayar. Abhijit Bhatlekar / Mint

Mumbai: Sanjay Nayar, chief executive of Citibank’s South Asia franchise and a veteran of 23 years at the firm, on Thursday announced he was leaving the bank to join US-based private equity firm Kohlberg Kravis Roberts and Co., or KKR, as CEO and country head, India.

Mark Robinson, a 24-year Citi hand who takes over from Nayar, will be the first foreign origin CEO of Citi India in nine years. Based in Mumbai, he will lead Citi’s banking franchise in India, Sri Lanka and Bangladesh, and will join the bank’s Asia-Pacific executive committee.

Nayar’s relationship with KKR goes back to 2006 when Citi advised and financed the private equity fund’s first investment in India—the software unit of Flextronics International Ltd for $900 million (around Rs4,175 crore then). In February, Citi again financed KKR’s $250 million investment in Bharti Infratel Ltd.

The timing of the resignation took employees at the bank’s headquarters in Mumbai’s Bandra-Kurla Complex by surprise even though the Indian banking circle has been speculating on Nayar’s quitting the Citi fold and joining the US-based private equity and global alternative asset management firm for about a year now. The Economic Times on Thursday reported that he would be quitting and moving to KKR.

Though the bank’s India operations have been posting healthy profits, its consumer finance business has been under strain. Rising non-performing assets, or NPAs, have forced Citibank NA to reposition CitiFinancial, the largest non-banking finance company (NBFC) in India.

In March, Nayar had told Mint that “irrational lending, loose underwriting norms and ample liquidity" in the market led to problems for the NBFC, which has been growing aggressively since its inception in 2000 following Citi’s global acquisition of Associates First Capital Corp. in the US.

In an interview with Mint, Nayar said Citi would not pull out of any business in India and that its efforts to cut jobs globally wouldn’t significantly impact India. Edited extracts:

Why KKR?

Moving on: Citi’s Sanjay Nayar. Abhijit Bhatlekar / Mint

It is too early to comment on the scope of my activity. I expect to join KKR by end of January.

Is the time right for KKR to launch in India?

KKR has an investment policy which focuses more on long-term investments. With such an investment policy, nothing is good time or bad time. Delink share price from the generic business momentum in the country (and) there is still optimism. I expect business momentum and investment activity to pick up. The banks are very well positioned in the current environment and with the learning in risk management they are expected to come out strong.

There could be a potential slowdown in corporate activity but, demographically, banks continue to have huge advantage.

However, despite this, you will need to keep the reforms process going—consolidation in the banking sector, development of the debt markets, moving towards Basel II implementation, among others.

What is the state of affairs at Citi India?

Our India franchise is very strong. We have applied the universal banking model in full. The India business is in great shape and is one of the biggest countries for Citi globally. It is an important market in Asia. We have a great team.

Change of guard: Mark Robinson takes over from Sanjay Nayar as Citi India chief executive.

In the past one year, we have let go of about 400 people which is reasonable. By the middle of next year the consumer finance arm will be in order and it will become a multi product engine serving the middle class of India.

However, I would like to clarify that we will not pull out of any business in India. We are entering 2009 on comfortable liquidity and capital.

Will there be any job cuts in India?

The job cuts announced globally will not have much impact on India. We are culling the underperformers but that we do every year. Of the global announcement of cutting 52,000 jobs, 50% includes people being laid off on account of the divestures of businesses which include e-Serve and the German retail business, and the balance would be on account of attrition and layoffs. This is a good step to get fit.

How has your stint with Citi been?

Superb! It is one of the best companies to work for.

Unlock a world of Benefits! From insightful newsletters to real-time stock tracking, breaking news and a personalized newsfeed – it's all here, just a click away! Login Now!

Catch all the Business News, Market News, Breaking News Events and Latest News Updates on Live Mint. Download The Mint News App to get Daily Market Updates.
More Less
Published: 21 Nov 2008, 12:07 AM IST
Next Story footLogo
Recommended For You
Switch to the Mint app for fast and personalized news - Get App