Citi India to get second new head since early 2009

Citi's chief executive officer for South Asia, Mark Robinson, has resigned to join ANZ, leaving the bank's key India franchise headless for the second time in the recent past. Pramit Jhaveri, who is vice-chairman of Asia investment banking as well as head of global banking at Citi India, is rumoured to be the frontrunner to replace Robinson.

Robinson was appointed to head Citi South Asia, comprising Citi in India, Bangladesh, Nepal and Sri Lanka, in November 2008 when Sanjay Nayar quit. Nayar was a Citi veteran who had headed the region since 2002. His departure for private equity firm Kohlberg Kravis Roberts & Co was widely perceived as a large loss for Citi.

The US bank chose another veteran Citi-banker to fill Nayar's shoes. Robinson had been with Citi for more than 25 years across a number of markets, including Russia, Turkey, Israel and Hungary. However, he had no familiarity with India and was the first expatriate CEO appointed to head Citi India in more than a decade. At the time, some sources expressed surprise that Citi was appointing someone with no prior knowledge of working in the region to run the India business -- one of Citi's largest and most well-entrenched worldwide. The India franchise spans consumer banking, corporate and investment banking, venture capital and private banking. Citi is a leading international bank in the country with approximately 10,000 employees and more than $3 billion of capital invested.

From the start, Robinson chose to do things differently from his predecessor. He based his family in Delhi and spent a great deal of time in India's capital, which is where the consumer business is headquartered. However, this meant he was away from the Mumbai headquarters of most of corporate India a lot of the time.

The India business was also seeing its share of stress when Robinson took over in early 2009. India did not escape unscathed from the credit crisis and this had an impact on both the wholesale and retail bank. In the wholesale bank, some of Citi's clients started to experience the effects of slowing demand or too much leverage. And in the consumer bank, delinquencies increased. Some sources say Robinson never fully came to terms with the business he took over and they are not surprised he has jumped ship.

As for the Australia and New Zealand Banking Group, it has been seeking to fill the position of CEO for South and Southeast Asia for over a year, said a source with knowledge of the development. Robinson's new role will see him head ANZ's franchise in Singapore, Indonesia, Vietnam, Cambodia and potentially Malaysia and India.

Speculation is rife that Robinson's role at Citi will be filled by Jhaveri who is also a Citi veteran with more than two decades of experience at the US bank, mostly in India.

One source said Citi has a tough balancing act in choosing a new country head. On the one hand the bank is keen that the incumbent should be someone known to corporate India and who can reasonably be expected to fill the role for some time. Corporate clients will be eager for some continuity after seeing Nayar and Robinson depart in quick succession. Jhaveri knows the bank's wholesale customers intimately and is well-regarded in the business community. His credentials in investment banking are also unparalleled, with Citi having been involved in a number of India's most innovative deals under his watch.

However, what is also pressing is the need to manage and grow the consumer and commercial businesses in a measured manner. Citi's biggest competitors in India in these businesses are Standard Chartered and HSBC. Standard Chartered recently reported that it earned over $1 billion from its Indian operations in 2009. A source estimates this was around a third more than Citi generated in India.

"Pramit [Jhaveri] totally deserves a larger job, but he has no experience with businesses like credit cards and commercial banking," said the source. "The country head for India also spends time interacting with regulators and overseeing Citi's various consumer finance subsidiaries, which again may not play to Pramit's strengths."

And it is precisely this issue which could be causing Citi to take some time in announcing a replacement. Robinson told the firm he was leaving early this month and Citi requested him to delay the formal announcement by a fortnight, said sources. Last week he was asked to further delay it by another week. Given how critical the head of India position is, Citi could have been expected to act more quickly.

Another source close to the development said that Jhaveri's appointment is almost a done deal, however, and that he is currently in New York, finalising the details. "Jhaveri may not be the perfect choice, but under the current circumstances he ticks the boxes for Citi," said the second source. 

Citi had no comment, while an ANZ spokeswoman said the bank cannot comment on market speculation at this time. Jhaveri could not be reached.