Citigroup is weighing the option of consolidating its consumer finance business in India.
The group operates its consumer finance business through The Associates, a wholly owned subsidiary of Citigroup, and CitiFinancial Retail Services, a joint venture with a local partner.
"The group is looking at bringing the entire consumer finance activities under one umbrella," Citigroup officials told Business Standard. The move is part of this strategy, as both companies compete with each other in the marketplace.
When contacted, a Citibank spokeswoman said, "Citibank as a policy does not comment on market rumours and speculations."
The Associates operates on a larger scale and has a turnover of over Rs 1,500 crore (Rs 15 billion). On the other hand, CitiFinancial Retail Services is a small company with a turnover of Rs 140 crore (Rs 1.4 billion).
Associates India is engaged in financing cars, two-wheelers, consumer durables, loans against homes and personal loans. The company is also a significant provider of commercial finance. P S Jayakumar, who was the sales and distribution head of Citibank NA, is the managing director of Associates. CitiFinancial is also into consumer financing and securitisation.
CitiFinancial Retail Services, formerly known as Nationwide Finance, was promoted by a former Citibanker. Later, Citigroup acquired majority control in the company.
"It is in negotiations to buy out the minority Indian partner, following which the consumer finance business will be integrated," the sources said.
It is reliably learnt that after the merger the activities will be operated under the CitiFinancial Retail Services name as it has a high brand equity in the market.
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