Foreign and private sector lenders may vie for the consumer banking franchise of Citi India, particularly credit cards, analysts said.

On Thursday, Citbank said it would exit the consumer banking business in India and 12 other countries. The consumer banking business covers credit cards, retail banking, home loans and wealth management.

Analysts said the business could generate interest from both big and small private sector banks apart from foreign lenders such as StanChart and HSBC who would be keen to expand their presence through such an acquisition.

Last year, Lakshmi Vilas Bank merged itself with DBS Bank India Limited, the wholly owned subsidiary of Singapore’s DBS Group. The acquisition boosted DBS’s base of retail and SME customers.

According to the analysts at Jefferies, Citi India has $4.1 billion in retail assets. In India’s retail segment, Citi has built a stronger presence in credit cards where it has a 6 per cent share of total spends. Besides, 40 per cent of its retail loan exposures are in housing.

“Citi’s exit from India (form and timing awaited) will be an opportunity for players in India to either acquire the existing stock of clients and/or gain market share in segments like credit cards, deposits and retail loans.” Jefferies said.

“Private banks and credit card companies like SBI Cards can be key beneficiaries of market share gains in the credit card segment. Some smaller private banks might be interested buyers of the India portfolio as they are looking to scale-up in the segment. Foreign banks might also look to expand presence.’’

For the year ended March 31, 2020, Citi India had posted a net profit of Rs 4,912 crore, up from Rs 4,185 crore in the previous financial year. Further, its asset quality was stable with net non-performing assets standing at 0.6 per cent.

In the year, Citibank India served 2.9 million retail customers with 1.2 million bank accounts and 2.2 million credit card accounts. The lender then had close to 6 per cent market share of retail credit card spends in the country, while average spends per card was 1.4 times higher than the industry average.

A report from Macquarie Research said that the bank’s credit card base has grown at a compounded annual growth rate of 1.6 per cent over the last 10 years, lower than the Indian credit card market.

Its analysts added that given Citi India’s mix of premium cards, there could be a lot of interest among large players such as SBI Cards, ICICI Bank and Axis Bank and from others such as IndusInd Bank, RBL Bank, IDFC First Bank and DBS Bank.