The State Bank of Pakistan has allowed Habib Bank Limited and Bank Alfalah Limited to conduct due diligence for acquiring the Citi Bank Consumers’ portfolio. The portfolio includes Credit Card business, auto financing and personal loans.
The banks will evaluate the consumer business of Citi Bank, which is selling it as a step towards divestment. Citi Bank has acquired permission from the Central Bank to provide non-objection certificate to the said banks for conducting due diligence.
As soon as the due diligence will be completed by the banks, an offer price would be given to Citi Bank for negotiation among the parties. After that acquisition of the consumer’ portfolio by the bid-winner, will take place subject to the approval from SBP.
It is worth noted, that both of the above banks had also applied with SBP for conducting due diligence for HSBC, but the permission was not granted to them by SBP.
Citi Bank has its presence in Pakistan for the last six decades and serving both corporate and consumer clients. The bank’s consumer portfolio comprises largely of elite customers availing services like credit cards, auto and personal financing.
The bank also offers corporate and investment banking services to different public sector institutions, local and multinational corporates and financial institutions.
Citi Bank can rightly be considered as a leader in consumer banking in Pakistan and selling its consumer segment is a bit of surprise move. The Bank has also provided top bankers like Mr. Shaukat Tareen , Advisor to CEO silk bank and CEO of Tameer Microfinance Bank Mr. Nadeem Hussain. Despite of being operative with only 11 branches in Pakistan, Citi Bank had remained very successful in proving itself as one of the leading foreign bank.
Citi Bank has been scaling back its global branch network as a strategic move for the past five years after the recession. It has carried lay-offs and restructured its operations in many countries including Pakistan. In 2011 it has already sold its housing finance portfolio of Bank Islami for PKR 953 million.