Consumer Behavior - Citibank

Topics: Interest, Bank, Citibank Pages: 5 (886 words) Published: April 28, 2013
1)An introduction to the background of the company, the product and its target audience

A)The Company
Citibank Singapore Ltd
Wholly-owned subsidiary of Citigroup, one of the world's largest financial services organisations. Offer financial services including deposit accounts, foreign currency deposits and investments, credit cards, mortgages, insurance and charge cards.

Global Consumer Banking division began banking operations in Singapore in 1982. Formidable market player with major market share in key businesses One of the four foreign banks to be awarded the Qualifying Full Bank (QFB) license by the Monetary Authority of Singapore (MAS) in 1999  Well-known for its people management practices

In June 2004, Citibank announced its move to incorporate a wholly-owned subsidiary of Citigroup in Singapore, known as Citibank Singapore Ltd, with a paid-up capital of S$1.5 billion. This was one of the strategy to grow its international businesses, and reaffirms the bank's long-term commitment to the Singapore.

Established its operations in Singapore on 1 July 1902.
Known as the International Banking Corporation (IBC)
Located at 1 Prince Street
Primarily involved in the trade financing of Malayan rubber and tin exports in the early twentieth century.  Established the Consumer Bank in 1982 to cater to the needs of individuals and small businesses.

Financial strength
Citibank Singapore is financially strong and well capitalized. As of 31 December 2011, Citibank Singapore has S$1.5 billion in paid up capital  Total equity of S$4.7 billion.
Meet all regulatory requirements set by the Monetary Authority of Singapore. In terms of Capital Adequacy Ratios (CAR), Citibank Singapore far exceeds the stipulated requirements.

B)The Product
Purpose of Installment Loans
A form of lending to consumers to purchase goods and services costing beyond their means •To ease the the stress on cash flow in country with high standard of living like Singapore •To ease payment of big ticket goods and services

Providing liquidity of funds
By structuring such loans into installment programs will help consumers save up on interests •Provide consumers a discipline payment method
Instalment Loan without Interest (Short Tenure) – Ready Credit PayLite
Example: Loan amount of $10,000 for 6 month installment
Upfront Service Fee: $10,000 X 2.5% = $250
Monthly Installment amount: $10,000  6 month = $1,666.67
Additional Features:
No restructuring
No penalty for early repayment

Installment Loan with Interest (Long Tenure) – Ready Credit PayLite
Example: Loan amount of $10,000 for 24 month instalment
Total Interest: ($10,000 X 6.63%) X 2 = $1,326
Monthly Installment amount: ($10,000 + $1,326)  24 months = $471.92 Additional Feature:
No additional fees for restructuring (Flexibility)
Early repayment will incur penalty
3% of unbilled loan amount or $100, whichever higher will be charged
C)The Target Audience
Target Audience
Middle-Low income group
Low disposable income
Additional funds to invest when opportunities comes
Starting a family / living in Singapore
Newly Weds
Starting a family / Buying of House / Child Birth
Adult Students
Further studies
Customers with many Dependents
“Sole Breadwinner” in family
Retired parents & Schooling Kids
Young Working Adults
In pursue of materialistic gains 
2) Explain the consumer’s needs and motives in buying such a product. Voluntary
Ease credit payment
Credit card outstanding amount
Big Ticket Purchases
Luxury Items
Down Payment for Car or Housing
Stocks and Shares
Foreign Exchange Market
Business Use
Initial Capital
Capital Turnover
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