Citibank India net profit rises 20%

Buoyed by a rise in profit from treasury operations, Citibank On Wednesday said the net profit of its Indian operations rose 20.45 per cent to Rs 2,173 crore during 2008-09, despite a 53 per cent rise in provisions and contingencies.

While total revenues grew by 24 per cent to Rs 10,423 crore at the end of March 2009 from Rs 8,410 crore a year ago, interest income increased 15 per cent to Rs 6,840 crore.

In addition to Citibank, which has 40 branches in India, Citi operates several other vehicles. All the companies — barring Citifinancial Consumer Finance India and Citi Wealth Advisors — remained profitable. In a statement, Citi said that Citifinancial, the non-banking finance company was “impacted by the challenges of deterioration in unsecured credit quality that affected the entire industry”. Citi Wealth Advisors was at a nascent stage of operations.

“Notwithstanding the slowdown in the local economic environment arising from unprecedented turmoil in global markets, the strong performance of Citibank India branch underscores our strengths built up over 107 years in the country. During the year, we assisted many of our corporate customers to raise capital in the local market and, by using our global product expertise, to access international capital markets,” Citi’s CEO for South Asia Mark T Robinson said.

During the last financial year, pre-tax profit from treasury operations rose by over 77 per cent to Rs 2,577.9 crore. The share of treasury in pre-tax profits increased from 43 per cent at the end of March 2008 to 66 per cent last year.

Nearly half Citibank’s provisions were accounted for by those for non-performing assets and net loan write-offs, which rose 2.6 times to Rs 1,607.20 crore for the year-ended March, compared with Rs 616.67 crore in 2007-08.

Gross NPAs shot up 2.3 times to Rs 1,805.7 crore at the end of March 2009 from Rs 791.6 crore a year ago.

In all provisions and contingencies, including those for taxes were estimated at Rs 3,233 crore during 2008-09.