New York/Mumbai Citigroup Inc. today announced that it has reduced its 11.4 percent stake in Housing Development Finance Corporation Ltd. (HDFC) by 1.5 percent to a 9.9-percent beneficial interest. Headquartered in Mumbai, HDFC (www.hdfc.com) is an Indian non-bank financial company that is a leader in housing finance and mortgages with $37 billion of total assets as of March 31, 2011.
Reducing its holdings in HDFC to below 10 percent is part of Citi's mitigation efforts ahead of the adoption of Basel III capital rules. The transaction resulted in a pre-tax profit of approximately $160 million. Citi has no plans to sell any additional shares of HDFC.
"We have been an investor in HDFC since 2005 and continue to have a very strong and productive relationship with its senior management team," said John Gerspach, Chief Financial Officer of Citigroup. "This transaction was motivated by our capital planning as we prepare for the implementation of Basel III, rather than strategic considerations."
"Citi remains deeply committed to India, and we continue to invest in our franchise in this very important market," said Pramit Jhaveri, Chief Executive Officer of Citi India. "We have unique experience, deep relationships and local insights, all of which are strong competitive advantages."
Today, Citi is one of the largest foreign banks in India employing nearly 8,000 people and is integrally connected to the trade and capital flows in the region touching 16 percent of nationwide foreign exchange flows and 8 percent of trade flows. Citi also plays a leading role in helping multi-nationals expand in India and also helping Indian companies grow overseas. Over the past three years, Citi has helped raise nearly $60 billion from the capital markets for its clients in India and advised on nearly $25 billion of India-related M&A. In the consumer business, Citi has 42 full-service Citibank branches in 30 cities and a market share of greater than 20 percent in credit card spends.
Citi, the leading global financial services company, has approximately 200 million customer accounts and does business in more than 160 countries and jurisdictions. Citi provides consumers, corporations, governments and institutions with a broad range of financial products and services, including consumer banking and credit, corporate and investment banking, securities brokerage, transaction services, and wealth management. Additional information may be found at www.citigroup.com.