Rating Rationale
March 11, 2025 | Mumbai
Citibank N. A.
Ratings reaffirmed at 'Crisil AAA/Stable/Crisil A1+'
 
Rating Action
Rs.5000 Crore Certificate of DepositsCrisil A1+ (Reaffirmed)
Subordinate Bond Aggregating Rs.320 CroreCrisil AAA/Stable (Reaffirmed)
Note: None of the Directors on Crisil Ratings Limited’s Board are members of rating committee and thus do not participate in discussion or assignment of any ratings. The Board of Directors also does not discuss any ratings at its meetings.
1 crore = 10 million
Refer to Annexure for Details of Instruments & Bank Facilities

Detailed Rationale

Crisil Ratings has reaffirmed its ‘Crisil AAA/Stable/Crisil A1+’ ratings on the debt instruments of Citibank N. A.’s India operations (Citibank India).

 

The ratings continue to be primarily based on the counterparty credit ratings of ‘A+/Stable/A-1’ by S&P Global Ratings [S&P Global] on Citibank N A.

 

The ratings also factors in Citibank India’s comfortable capitalization and well established presence,  healthy resource and earnings profile. These strengths are partially offset by its modest scale of operations in Indian banking system

Analytical Approach

Crisil Ratings has mapped the rating on Citibank India to S&P Global’s rating on Citibank N. A., translated to the Crisil Ratings’ scale

Key Rating Drivers & Detailed Description

Strengths:

  • Expectation of strong support from Citibank: The ratings on Citibank India continue to be based on the counterparty credit rating of A+/Stable/A-1’ by S&P Global on Citibank N A. Citibank India will continue to benefit from the funding, strategic and management support from its head office.

 

Citibank India also benefits from a high level of operational synergies with its counterparty, senior management oversight, common risk management systems and standards and treasury platforms. These arrangements of Citibank India with the counterparty for specific support or expertise is basis arms-length arrangement. Any change in the strategic importance of the Indian market to Citibank N A. will be a rating sensitivity factor.

 

  • Well-established financial services provider; amongst the largest foreign banks in India: Citibank India is one of the largest foreign banks operating in India since 1902, with reported asset size of Rs 265,357 crore as on September 30, 2024, and Rs 259,588 crore as on March 31, 2024. The bank and its subsidiaries have successfully leveraged the Citibank brand and offer a wide range of products and services to clients in financing and fee-based activities, including corporate and investment banking, brokerage, treasury and trade services, securities and fund services.

 

  • Comfortable capitalisation: Citibank India has comfortable Tier I ratio of 17.1%, overall capital adequacy ratio (under Basel III) of 18.8% and networth of Rs 43,370 crore as on September 30, 2024 (16.7%, 18.7% and Rs 43,979 crore, respectively in fiscal 2024). Capitalisation is supported by healthy accruals and the expectation of continued support from Citibank N A.

 

  • Healthy resource.es profile, benefitting earnings profile: The bank has healthy resource profile. Deposits grew 3.4% (annualized) during the first half of fiscal 2025 to Rs 194,847 crore as on September 30, 2024, from Rs 191,626 as on March 31, 2024 (annual growth of 30% in fiscal 2024).  It has a high level of current account savings account (CASA) deposits, which enables the bank to maintain lower than industry average deposit costs. CASA deposits constituted 45% of the deposits as on March 31, 2024. Cost of borrowings for fiscal 2024 was low at 2.6%, compared with 2% a year earlier.

 

Marked by the comfortable interest spreads and higher portion of ‘other income’ compared to the industry, the earnings profile remains comfortable. Return on assets (RoA) stood at 2.6% in fiscal 2024 as compared to 1.9%# in fiscal 2023. Net interest margin (net interest income/average Assets) remained healthy at around 4.6% in fiscal 2024 as compared to 4.8% in fiscal 2023. Operating expenses (as a percentage of total assets) have also reduced to 1.8% in fiscal 2024 (2.4% in fiscal 2023).

 

#Ratios for FY 2022-2023 exclude gain on sale of Consumer Banking Business

 

Weakness:

  • Modest scale of operations in India banking system: Citibank India's scale of operations remains modest in relation to the overall banking system assets. The bank is now providing corporate banking after selling off its retail business to Axis Bank. At an overall level, as on September 30, 2024, Citibank India accounted for a share of around 0.4% of advances in the Indian banking system.

Liquidity: Superior

Citibank India will continue to maintain superior liquidity on an ongoing basis. The bank maintains positive cumulative mismatches in the up-to-one year bucket. It also holds sizeable excess investments in government securities in line with the global parent's requirement, which can be utilised during short-term stress. Average liquidity coverage ratio for the quarter ended March 31, 2024, stood at 154.3%.

Outlook: Stable

Crisil Ratings believes Citibank India will remain strategically important to, and will continue to receive financial, managerial, and operational support from Citibank N A.

Rating sensitivity factors

Downward factors

  • Downward revision in the S&P Global rating of Citibank N A by more than three notches
  • Any change in the expectation of support from Citibank N A to Citibank India

About the bank

Citibank N. A. is in India for over 120 years. The bank offers institutions a broad range of financial products and services, including corporate and investment banking, brokerage, treasury and trade services, securities and fund services. The bank targets its strategic efforts in the priority areas of Financial Capability & Asset Building, Microfinance, Enterprise Development, and Youth, Education & Livelihoods.

 

For fiscal 2024, Citibank India reported profit after tax (PAT) of Rs 6,237 crore on total income (net of interest expense) of Rs 15,482 crore, as against Rs 13,614 crore and Rs 25,318 crore, respectively, for the previous year. There was a sharp increase in PAT during fiscal 2023, due to the one-time gain on slump sale.

Key Financial Indicators

As on/for the period ended March 31

 

2024

2023

2022

Total assets

Rs crore

259,588

217,302

233,265

Total income

Rs crore

20,037

28,719^

14,660

PAT

Rs crore

6,237

13,614^

3,727

Gross NPA

%

0.3

0.4

1.1

Overall capital adequacy ratio

%

18.7

20.7*

17.4

Return on assets

%

2.6

1.9#

1.6

^Total Income & PAT for fiscal year 2023 include gain on sale of consumer banking business

*Reported Capital Adequacy Ratio (CAR) for fiscal year 2023 was 20.7% as compared to recomputed CAR of 17.9% based on RBI inspection for the same period.

#ROA for fiscal year 2023 excludes gain on sale of consumer banking business

Any other information: Not Applicable

Note on complexity levels of the rated instrument:
Crisil Ratings` complexity levels are assigned to various types of financial instruments and are included (where applicable) in the 'Annexure - Details of Instrument' in this Rating Rationale.

Crisil Ratings will disclose complexity level for all securities - including those that are yet to be placed - based on available information. The complexity level for instruments may be updated, where required, in the rating rationale published subsequent to the issuance of the instrument when details on such features are available.

For more details on the Crisil Ratings` complexity levels please visit www.crisilratings.com. Users may also call the Customer Service Helpdesk with queries on specific instruments.

Annexure - Details of Instrument(s)

ISIN Name Of Instrument Date Of Allotment Coupon Rate (%) Maturity Date Issue Size (Rs.Crore) Complexity Levels Rating Outstanding with Outlook
NA Certificate of Deposits NA NA 7-365 Days 5000.00 Simple Crisil A1+
NA Subordinate Bond# NA NA NA 225.00 Simple Crisil AAA/Stable
NA Subordinate Bond# NA NA NA 95.00 Simple Crisil AAA/Stable

#Yet to be issued

Annexure - Rating History for last 3 Years
  Current 2025 (History) 2024  2023  2022  Start of 2022
Instrument Type Outstanding Amount Rating Date Rating Date Rating Date Rating Date Rating Rating
Certificate of Deposits ST 5000.0 Crisil A1+   -- 12-03-24 Crisil A1+ 13-03-23 Crisil A1+ 22-12-22 Crisil A1+ Crisil A1+
      --   --   --   -- 08-04-22 Crisil A1+ --
Subordinate Bond LT 320.0 Crisil AAA/Stable   -- 12-03-24 Crisil AAA/Stable 13-03-23 Crisil AAA/Stable 22-12-22 Crisil AAA/Stable Crisil AAA/Stable
      --   --   --   -- 08-04-22 Crisil AAA/Stable --
All amounts are in Rs.Cr.
Criteria Details
Links to related criteria
Criteria for Banks and Financial Institutions (including approach for financial ratios)
Basics of Ratings (including default recognition, assessing information adequacy)

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