Citibank Savings joins credit-card trade

MANILA, Philippines—Citibank Savings Inc. (CSI) is breaking into the credit-card business to complement its parent Citigroup’s leading market position in the Philippine credit-card market.

In an interview with the Philippine Daily Inquirer on Wednesday, CSI president J. Antonio Itchon said the savings bank, a wholly owned unit of Citibank N.A., would roll out in the next few weeks two credit-card products in order to make the most out of the distribution capability of its 36-branch network.

Parent bank Citi is the country’s leading credit-card issuer with over 1 million credit cards in force. In likewise entering this business, the savings bank will use the same credit criteria and infrastructure used by its parent bank.

“There is no differentiation in the standard. These are two different banks with different licenses. The intention is not to differentiate but to extend the (Citi) brand,” Itchon said.

“The Citibank Savings distribution allows us to reach customers that the main Citibank doesn’t reach,” he stressed.

Combining the branches with its parent bank, Citigroup has a total distribution network of 42 branches in the Philippines.

Despite the cutthroat competition in the credit-card industry, Itchon said the potential for CSI to grow the business was even beyond the basic cross-selling opportunities provided by the saving bank’s existing customer base.

The foray into its own credit-card business, Itchon said, would be part of CSI’s “deepening” and “widening” of its consumer lending business.

CSI, to date, is a leading provider of personal loans, but with the launch of its credit-card business, Itchon said the latter was expected to grow briskly. “It will be the biggest business on the asset side, even if starting relatively late. It will outpace personal loans,” he said.

The bank’s consumer lending portfolio has expanded by double-digit levels in the last few years and this pace is expected to be sustained in the years ahead, especially with the rollout of the credit-card business.

The first credit-card product to be launched by CSI in the few weeks will be a product that offers cash-back points or instant rebates to issuers. Another credit-card product, which would be a co-branded credit card, would be unveiled immediately after, Itchon said.

Apart from its personal loans and upcoming credit cards, CSI provides loans to middle-market enterprises or those with an annual turnover of at least P1 billion.