Citigroup on way to rejig India biz to cut costs

New York, Nov 2 (PTI) Citigroup, which recently reported
a net loss of USD 2.8 billion for the quarter ended September
30, has said its business in India is being actively
repositioned to cut the costs and offset the losses.

In a regulatory filing, Citigroup said, "Higher credit
costs were mainly driven by continued deterioration in the
credit environment in India, where the business is being
actively repositioned to reduce costs and mitigate losses."

Last month, Citigroup had reported a net loss of USD 2.8
billion for the quarter ended September, while the U.S.
financial behemoth led by Indian origin chief executive Vikram
Pandit had clocked a net profit of USD 2.2 billion for the
same period a year ago.

For the quarter under review, Citi incurred a net pre-tax
write-downs in securities and banking totalling USD 4.4
billion, net credit losses to the tune of USD 4.9 billion
and another USD 3.9 billion as net charge to increase loan
loss reserves.

The regulatory filing further said that "credit costs in
Asia increased 25 percent primarily due to a USD 149-million
incremental pre-tax charge to increase loan loss reserves,
increased credit costs, especially in India, acquisitions and
portfolio growth".

For the third quarter of 2008, provisions for credit
losses, and for benefits and claims increased 24 percent as
compared to the same period last year.

Outside North America, Citigroup's credit costs increased
by USD 277 million in Europe, the Middle East and Africa
(E.M.E.A.), USD 894 million in Latin America, and USD 237
million in Asia.

These increases were driven by higher net credit losses,
which were up USD 170 million, USD 542 million and USD 105
million in E.M.E.A., Latin America and Asia, respectively.

Citigroup said, "Higher net credit losses were driven by
Mexico, Brazil and India, as well as the impact of
acquisitions."

So far this year, provisions for credit losses and for
benefits and claims increased USD 7.5 billion, reflecting
significantly higher net credit losses in North America,
Mexico and India, Citigroup said.

Citi's revenues for the third quarter stood at USD 16.7
billion, down 23 percent as compared to the corresponding
period a year ago. The decline was driven by USD 4.4 billion
in net write-downs in securities and banking and lower
secularisation results in North America Cards, among others.

Earlier in April, Citigroup India had decided to put its
commercial vehicle finance business unit on sale in line with
its global asset sale strategy to raise capital from
less-efficient divisions.