Citi India focuses on instant loans to grow its retail portfolio




Citibank India, the country’s most profitable foreign lender, is focusing on instant loan disbursement to cross-sell at a rapid pace and grow its retail portfolio (individual borrowers). After launching instant personal loans a few quarters ago, the lender launched instant mortgages and instant credit cards for existing customers.

Banks are increasingly turning to online loan disbursement to expand their retail portfolio.

“My focus on cross-selling allows me to grow incrementally, but digitalization provides a much faster scale for expansion as we reach the customer at a faster pace. Previously, there was piecemeal automation of a process, either at the approval or documentation stage, which eliminated some manual steps. Now we make the whole process instantaneous,” said Kartik Kaushik, National Director of Retail and Commercial Banking.

Like other lenders, Citibank is keeping its instant loan offer for existing customers.

However, the online mortgage which launched in the quarter ended June is only available for pre-approved properties. The lender says the online disbursement of personal loans, which launched in the quarter ended December, is starting to show good traction.

“In just six months after launch, a quarter of personal loans are through our instant personal loan service,” Kaushik said.

This is part of the overall strategy of gradually digitizing all offers, end to end. In fact, across Asia, the lender said 95% of all its transactions already take place outside of a branch.






INSTANT STRATEGY
  • After launching instant personal loans a few quarters ago, Citibank launched instant mortgages and instant credit cards for existing customers
  • Banks are increasingly turning to online loan disbursement and have moved the entire process online
  • An online mortgage, launched in the quarter ending June, is only available for pre-approved properties
  • Lender says online disbursement of personal loans, launched in quarter ended December, is starting to show good traction
  • In Asia, one in five new credit card accounts acquired come from digital sources
  • In India, a third of the bank’s customers would go digital



Apart from this, online medium is now increasingly used as an acquisition tool and in Asia, one in five new credit card accounts acquired comes from digital sources. In India, a third of the bank’s customers would be acquired via the digital medium.

However, over the past financial year, Citibank India’s performance has come under pressure. The lender recorded a 5% drop in net profit for the year ended in March. Profit after tax amounted to Rs 3,233 crore in FY16 compared to Rs 3,423 crore in the prior year. Portfolio pressure is believed to have emerged from the corporate side and the bank’s retail portfolio has seen steady growth. “The growth of consumer activities has been steady. The retail book CAGR (compound annual growth rate) is in the double digits and it continues to stay that way,” Kaushik said.



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