Citigroup reduces stake in HDFC by 1.5%

Citigroup today said that it has reduced its 11.4 % stake in Housing Development Finance Corporation (HDFC) by 1.5 % to a 9.9 % beneficial interest.

Citigroup on Tuesday said that it has reduced its 11.4 % stake in Housing Development Finance Corporation (HDFC) by 1.5 % to a 9.9 % beneficial interest.

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Reducing its holdings in HDFC to below 10 % is a 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, a press release issued here stated.

Citigroup has no plans to sell any additional shares of HDFC, it added.

"We have been an investor in HDFC since 2005 and continue to have a very strong and productive relationship with its senior management team. This transaction was motivated by our capital planning, as we prepare for the implementation of Basel III, rather than strategic considerations," Citigroup's Chief Financial Officer, John Gerspach, said.

"Citi remains deeply committed to India and we continue to invest in our franchise in this very important market. We have unique experience, deep relationships and local insights, all of which are strong competitive advantages," Citigroup India's CEO, Pramit Jhaveri, said.

In the consumer business, Citigroup has 42 full-service Citibank branches in 30 cities and a market share of over 20 % in credit card spends.