Citi rules out selling stakes in Indian, Chinese banks: report

London, May 27 (PTI) Troubled financial services firm
Citigroup, which was bailed out by the US government last
year, has ruled out selling its stakes in Indian and Chinese
banks, says a media report.

In an interview to the Financial Times, Citigroup's
Asia-Pacific region Chief Executive Officer Ajay Banga ruled
out selling the US group's stakes in Chinese and Indian banks.

He also said the bank, which was rescued by the US last
year, also planned to expand lending across the region in
spite of the "challenging" economic environment.

The Asia-Pacific region, which for Citi includes Japan
and Australia, accounted for 30 per cent of the bank's
revenues last year, spanning corporate and consumer lending,
credit cards, trading and private banking, the report said.

"It is in US taxpayers' best interests that we continue
to grow in a region which is delivering strong profits across
all its business lines," the report quoted Banga as saying in
the interview.

The FT report said his comments would serve as a counter
to sceptics who believe that Citi would be forced to cut back
its Asian operations amid domestic political pressure
to focus on lending to US clients.

A stress test by the US govenment later found that Citi
still required a further 5.5 billion dollars in capital to
guard against losses if the recession worsened.

This has prompted speculation that the bank could be
forced to follow some of its western rivals and raise cash by
selling lucrative stakes in Chinese and Indian banks, FT said.

Citi is the leading shareholder in India's HDFC and Banga
pledged that Citi would keep its stake in HDFC, which he
described as among India's "best run financial institutions".

Besides, Citi also owns a 20 per cent stake in Chinese
Guangdong Development Bank and a 3.75 per cent stake in
Shanghai Pudong Development Bank.

"Selling our stakes in Chinese banks does not make sense
either. How else would we gain access to the opportunities in
an area such as the Pearl river delta?" Banga told FT.

However, the report stated that this month Citi sold its
Japanese domestic securities business to Sumitomo Mitsui
Financial Group in a 7.8 billion dollars deal that helped
bolster its battered balance sheet.

Meanwhile, Banga has cautioned that Citi's revenues in
the region would be under strain this year, given the
"challenging" economic backdrop and uncertainty over the
sustainability of the stock market recovery.

"It could be another nine to 12 months until US economy
shows signs of real improvement, which is key to export
orientated economies of Asia-Pacific," he added. PTI SP
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