Citi launches co-branded credit cards with Grab, a Southeast Asian company, looking for new customers

HONG KONG (Reuters) – Citigroup is partnering with Singapore-based Grab to launch co-branded credit cards as it plans to increase its Asian customer base by 13 percent through partnerships. with digital companies, a senior Citi executive said.

The new cards mark the final stage of Grab's vast breakthrough in the financial services sector, a field he has been pursuing for growth. For the US bank, it is part of its strategy to offer its products in online ecosystems, consumers spending more time on smartphones.

The Citi-Grab co-branded cards will be issued Tuesday in the Philippines and Thailand later this year, before being launched in other markets in Southeast Asia.

"We currently have about 16 million customers in Asia and we want to increase this figure to about two million over the next few years only through partnerships," said Gonzalo Luchetti, Head of Banking Services. Citi retail customers in Asia Pacific, Europe, Middle East and Europe. Africa, told Reuters.

Citi launched a co-branded credit card with Indian payment company Paytm last month and with Qantas two years ago.

The bank's net profit for the Asia-Pacific region was $ 4.4 billion in 2018, with one third of its $ 15.3 billion revenue from South East Asia – Grab being first company of this type.

Grab, which started out as a taxi application company, aggressively developed into financial services and said earlier this year that it was seeking loan licenses in Asia. South East.

"The Citi-Grab credit card is a natural next step as we are creating more value for our first digital generation, still among GrabPay users," said Huey Tyng Ooi, Managing Director of GrabPay in Singapore, Malaysia and the Philippines, in a statement.

Grab is also exploring the possibility of splitting its financial services unit and instructing banks to approach potential minority investors, Reuters reported last month, citing sources.

Banks and insurance companies are potential investors in the Grab unit, a source said.

Lenders around the world are trying to partner with digital readers to get closer to consumers.

The recent agreement between Goldman Sachs and Apple on credit cards would connect Goldman to hundreds of millions of iPhone users.

NEED FOR RELEVANCE

Competition is fierce, however, as banks try to work with the best-performing digital players, who compete with each other for the best possible deal with the banks.

"We're not alone in having the blinding view that customers spend more time on their phones, whether it's paying, sharing, or exchanging conversations, but it's about how you partner "said Luchetti, of Citi.

"Thirty years ago, if you wanted to be relevant to your customers, you had to have as many branches as possible. Today … people spend hours every day in these virtual cities and the equivalent of having a branch at every corner is to be able to provide your services within these digital ecosystems. "

Citi has closed hundreds of branches in Asia in recent years, bringing its network of 600 to around 250, while investing, like its competitors, in digital initiatives.

"We have now reached a decent point of stability," said Luchetti. "If you asked me to bet on the number of branches we will have in a few years, I would say a figure among the lowest of 200".