Citibank Credit Card

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REV: OCTOBER 2, 2002


Citibank: Launching the Credit Card in Asia Pacific (A)
On a rainy afternoon in 1989, Rana Talwar, head of Citibank's Asia Pacific Consumer Bank, reflected upon the 11 years that had gone by since the Consumer Bank had established its consumer business in Asia. The branch banking business operations in 15 countries throughout Asia Pacific and the Middle East projected Citibank as a prestigious, consumer-oriented international bank and as the undisputed leader in most marketplaces. With earnings of $69.7 million in 1988, and a goal of $100 million in 1990, Talwar considered the launch of a new product (credit cards) as a way of growing future revenues. (See Exhibit 1 for 1988 performance.) Cards could prove to be an excellent way to overcome distribution limitations imposed on foreign banks in the Asia-Pacific region: first, by acquiring card members, by targeting customers outside its branch business and, then, by actively cross-selling other Citibank products and services to these customers. In the past, the credit card idea had met with skepticism from Citibank's New York headquarters as well as its country managers. Many in New York considered it a risky investment. Senior credit managers questioned the wisdom of issuing cards in markets with annual per capita income of $350 and also in markets with little credit experience and hardly any infrastructure. The Citibank management recognized that the economies of most Asia-Pacific countries were relatively underdeveloped compared with the United States and Europe; consumers' attitudes and credit card usage patterns differed country by country. In this context, several country managers were unsure whether the success of Citibank's U.S. card business could be projected onto Asia-Pacific. Further, they wondered whether Citibank could adopt a mass-market positioning to acquire enough credit card customers and still maintain its up-market positioning with the current upscale branch banking customers. A premium-priced card product would not sell in the marketplace in a large way, it was argued. Moreover, country managers were not comfortable with an unsecured credit product such as credit cards and did not want to take the large losses of a card business, in the initial years, that their projections seemed to indicate. Weak local infrastructure, limited distribution capabilities, and the experience with loss-making proprietary credit card businesses that some of the countries had, served to underline arguments against a credit card launch. Pei Chia, who had been appointed in late 1987 to head Citibank's International Consumer businesses, had experience managing Citibank's huge U.S. card businesses and was favorably disposed towards international expansion. Confident of support from his boss if a viable proposition could be structured, Talwar pondered the pros and cons of a credit card product. If he decided to push for the product, he would need to articulate a viable business strategy.


Professor V. Kasturi Rangan prepared this case with the research assistance from Marie Bell and Melanie Alper as the basis for class discussion rather than to illustrate either effective of ineffective handling of an administrative situation. Copyright © 2002 President and Fellows of Harvard College. To order copies or request permission to reproduce materials, call 1-800-545-7685, write Harvard Business School Publishing, Boston, MA 02163, or go to No part of this publication may be reproduced, stored in a retrieval system, used in a spreadsheet, or transmitted in any form or by any means—electronic, mechanical, photocopying, recording, or otherwise—without the permission of Harvard Business School.



Citibank: Launching the Credit Card in Asia Pacific (A)

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