An outside review of Citigroup Inc.'s management team has concluded that it is generally in good shape and awarded strong overall marks in particular to the banking giant's Indian American CEO Vikram Pandit, according to a media report.
The review, conducted this summer for Citigroup's board by recruiting and consulting firm Egon Zehnder International, however suggested that some shuffling of senior executives might be needed, the Wall Street Journal reported Wednesday citing people familiar with the matter.
Showing posts with label Citigroup. Show all posts
Showing posts with label Citigroup. Show all posts
Thursday, October 8, 2009
Wednesday, June 10, 2009
Citigroup begins $58 billion stock swap
Citigroup Inc on Wednesday began a long-delayed $58 billion stock swap that could leave the government with a 34 percent stake in the nation's third-largest bank.
Citigroup plans to swap common stock for as much as $33 billion of preferred shares, and convert as much as $25 billion of preferred shares held by the U.S. Treasury into common stock.
Citigroup said the swap could make it one of the world's best-capitalized banks, adding up to $61 billion of tangible common equity and $64 billion of Tier-1 common equity. It had planned to begin the swap in April.
The exchange offer could result in the issuance of more than 17 billion new common shares, diluting the holdings of existing investors by 76 percent. The public exchange offers expire July 24.
Citigroup shares closed Tuesday at $3.41.
Citigroup plans to swap common stock for as much as $33 billion of preferred shares, and convert as much as $25 billion of preferred shares held by the U.S. Treasury into common stock.
Citigroup said the swap could make it one of the world's best-capitalized banks, adding up to $61 billion of tangible common equity and $64 billion of Tier-1 common equity. It had planned to begin the swap in April.
The exchange offer could result in the issuance of more than 17 billion new common shares, diluting the holdings of existing investors by 76 percent. The public exchange offers expire July 24.
Citigroup shares closed Tuesday at $3.41.
Friday, May 8, 2009
Pandit's Citi to raise $5.5 bn with stock conversion
Ailing US banking giant Citigroup led by Indian American CEO Vikram Pandit plans to raise $5.5 billion by converting more preferred stock to common shares as prescribed by government stress tests.
"The government's stress test was a rigorous process that assessed our capital and confirms our view that Citi's plans and actions will give it the financial strength to weather an adverse stress scenario," Pandit said in a statement Thursday.
"The results also reflect 15 months of continuous work, tough decisions and steady execution towards a strong and stable Citi with a clear strategy for the future," he said.
Citi will expand the exchange offers previously announced in late February by increasing the maximum amount of preferred securities and trust preferred securities that it will accept in exchange for common stock from $27.5 billion to $33 billion.
The move will further increase Tier 1 common without any additional US government investment or conversion of US government securities into common shares, it said.
The transaction could increase the banking institution's Tier 1 capital to as much as $86.2 billion from $22.1 billion at the end of the first quarter. Citi's tangible common equity would rise to as much as $91.3 billion from $30.9 billion.
The news came in conjunction with the results of the Supervisory Capital Assessment Programme (SCAP), in which the US government said that Citi would need an additional $5.5 billion as a "buffer" in case of a "more adverse scenario."
Citi had said last month that it had delayed the exchange offer until after the stress tests were completed.
The conversion price of $3.25, the exchange factors and the priority of trust preferred securities accepted in the exchange offers will remain unchanged from the transaction terms as previously announced, it said.
Based on the maximum eligible conversion, the US government would own approximately 34 percent of Citi's outstanding common stock and existing shareholders would own approximately 24 percent of the outstanding common shares.
After being pressured by regulators, Citi split the company into a good bank-bad bank structure under Citicorp, the good bank, and Citi Holdings, the bad bank.
Citi also noted that since early 2008 it has reduced expenses by 25 percent and headcount by almost 20 percent from the fourth quarter of 2007. The company has also shaved 23 percent off its balance sheet from the third quarter of 2007.
Citi has also completed 23 divestitures, most notably with its Smith Barney joint venture with Morgan Stanley and its intended sale of Nikko Cordial to Japan's Sumitomo Mitsui Financial.
"The government's stress test was a rigorous process that assessed our capital and confirms our view that Citi's plans and actions will give it the financial strength to weather an adverse stress scenario," Pandit said in a statement Thursday.
"The results also reflect 15 months of continuous work, tough decisions and steady execution towards a strong and stable Citi with a clear strategy for the future," he said.
Citi will expand the exchange offers previously announced in late February by increasing the maximum amount of preferred securities and trust preferred securities that it will accept in exchange for common stock from $27.5 billion to $33 billion.
The move will further increase Tier 1 common without any additional US government investment or conversion of US government securities into common shares, it said.
The transaction could increase the banking institution's Tier 1 capital to as much as $86.2 billion from $22.1 billion at the end of the first quarter. Citi's tangible common equity would rise to as much as $91.3 billion from $30.9 billion.
The news came in conjunction with the results of the Supervisory Capital Assessment Programme (SCAP), in which the US government said that Citi would need an additional $5.5 billion as a "buffer" in case of a "more adverse scenario."
Citi had said last month that it had delayed the exchange offer until after the stress tests were completed.
The conversion price of $3.25, the exchange factors and the priority of trust preferred securities accepted in the exchange offers will remain unchanged from the transaction terms as previously announced, it said.
Based on the maximum eligible conversion, the US government would own approximately 34 percent of Citi's outstanding common stock and existing shareholders would own approximately 24 percent of the outstanding common shares.
After being pressured by regulators, Citi split the company into a good bank-bad bank structure under Citicorp, the good bank, and Citi Holdings, the bad bank.
Citi also noted that since early 2008 it has reduced expenses by 25 percent and headcount by almost 20 percent from the fourth quarter of 2007. The company has also shaved 23 percent off its balance sheet from the third quarter of 2007.
Citi has also completed 23 divestitures, most notably with its Smith Barney joint venture with Morgan Stanley and its intended sale of Nikko Cordial to Japan's Sumitomo Mitsui Financial.
Wednesday, October 8, 2008
Tata Consultancy to buy Citi arm for $505 mn
Notwithstanding the crisis in the global financial system, leading Indian information technology major Tata Consultancy Services (TCS) Wednesday said it will buy the outsourcing arm of Citigroup for $505 million.
In addition to the acquisition, TCS has entered into a $2.5 billion pact with US-headquartered Citigroup to provide outsourced services for a period of nine-and-a-half years, said a statement issued by the two groups.
The all-cash deal to acquire Citigroup Global Services, formerly called E-serve International, will particularly help refurbish the financials of the US-based giant, which is reeling under $61-billion credit-related write-downs.
The outsourcing arm of Citigroup, which has expertise in banking and financial services industries, employs more than 12,000 people in India, who are expected to generate revenues worth $278 million in the current year.
"This is a great transaction that benefits all parties - Citi, our customers, our employees and TCS," said Don Callahan, chief administrative officer of Citi.
"This transaction is expected to help reduce operating expenses related to business processing and will allow us to focus on our core financial services competence,” he added in a statement.
TCS, which is part of the $62.5-billion Tata group that has 96 companies in its fold, had been providing services to Citi since 1992, and hopes to conclude the twin-deals by the fourth quarter of 2008.
“This acquisition of Citigroup Global Services has two immediate strategic benefits for TCS,” said N. Chandrasekaran, executive director of the Indian company.
He listed the benefits as avenues to gain expertise in banking and financial services industries and integrate their existing products and solutions for large financial institutions and banks.
“We welcome Citigroup Global Services professionals into the TCS family, where they will be able to participate in the company's new growth endeavours.”
According to analysts on Wall Street, the money expected into the coffers of Citi will likely help its Indian-born chief executive Vikram Pandit to fund acquisitions like Wachovia Corp's branch operations.
Tata Consultancy employs more than 115,000 information technology consultants in some 50 countries, generating revenues worth $5.7 billion in the fiscal year ended March 31, 2008.
Despite the announcement of the mega deal, the shares of Tata Consultancy were down 6.23 percent on the Bombay Stock Exchange, as part of the overall meltdown of Indian equities Wednesday.
In addition to the acquisition, TCS has entered into a $2.5 billion pact with US-headquartered Citigroup to provide outsourced services for a period of nine-and-a-half years, said a statement issued by the two groups.
The all-cash deal to acquire Citigroup Global Services, formerly called E-serve International, will particularly help refurbish the financials of the US-based giant, which is reeling under $61-billion credit-related write-downs.
The outsourcing arm of Citigroup, which has expertise in banking and financial services industries, employs more than 12,000 people in India, who are expected to generate revenues worth $278 million in the current year.
"This is a great transaction that benefits all parties - Citi, our customers, our employees and TCS," said Don Callahan, chief administrative officer of Citi.
"This transaction is expected to help reduce operating expenses related to business processing and will allow us to focus on our core financial services competence,” he added in a statement.
TCS, which is part of the $62.5-billion Tata group that has 96 companies in its fold, had been providing services to Citi since 1992, and hopes to conclude the twin-deals by the fourth quarter of 2008.
“This acquisition of Citigroup Global Services has two immediate strategic benefits for TCS,” said N. Chandrasekaran, executive director of the Indian company.
He listed the benefits as avenues to gain expertise in banking and financial services industries and integrate their existing products and solutions for large financial institutions and banks.
“We welcome Citigroup Global Services professionals into the TCS family, where they will be able to participate in the company's new growth endeavours.”
According to analysts on Wall Street, the money expected into the coffers of Citi will likely help its Indian-born chief executive Vikram Pandit to fund acquisitions like Wachovia Corp's branch operations.
Tata Consultancy employs more than 115,000 information technology consultants in some 50 countries, generating revenues worth $5.7 billion in the fiscal year ended March 31, 2008.
Despite the announcement of the mega deal, the shares of Tata Consultancy were down 6.23 percent on the Bombay Stock Exchange, as part of the overall meltdown of Indian equities Wednesday.
Saturday, July 19, 2008
Citigroup posts $2.5 bn quarterly loss on new write-downs
Citigroup announced here Friday a loss of $2.5 billion in the second quarter, its third consecutive quarterly loss but lower than the earlier figures.
The loss was largely caused by $7.2 billion of write-downs of the global financial conglomerate's investments in mortgages and other loans and by a weakness in the consumer market, which cost Citigroup $4.4 billion in credit losses and $2.5 billion to increase reserves.
The loss from April through June was less than expected by analysts, media reports said, as Citigroup sold some of its subsidiaries and cut an additional 6,000 staff to stem the tide of rising losses.
Citigroup's India-born chief executive Vikram Pandit described the $2.5 billion loss as progress. In its earlier two quarterly reports, the group had booked losses of $9.8 billion and $5.1 billion respectively.
"We cut our second-quarter losses in half compared to the first quarter," Pandit said in a statement. "While there is still much to do, we are encouraged by our progress."
The bank has recorded over $56 billion in credit losses and write-downs in the last four quarters. Its share price has fallen nearly 70 percent since the credit market began to tighten.
In premarket trading Friday, Citigroup shares rose as high as $19.27, after closing Thursday at $17.97.
Pandit has put in motion sweeping asset sales to try to improve the company's balance sheet and free the bank of its more risky assets.
The group said on Friday that it sold an additional $99 billion of assets in the quarter, and two-thirds of them were investments made under Pandit's predecessor, Charles O. Prince III. The bank is also selling businesses like CitiCapital Diners Club International and its German retail banking unit.
Bank executives have said a recovery would take two to three years.
"This isn't like a sprint. This really is a marathon," Gary L. Crittenden, Citigroup's finance chief, said last week.
The loss was largely caused by $7.2 billion of write-downs of the global financial conglomerate's investments in mortgages and other loans and by a weakness in the consumer market, which cost Citigroup $4.4 billion in credit losses and $2.5 billion to increase reserves.
The loss from April through June was less than expected by analysts, media reports said, as Citigroup sold some of its subsidiaries and cut an additional 6,000 staff to stem the tide of rising losses.
Citigroup's India-born chief executive Vikram Pandit described the $2.5 billion loss as progress. In its earlier two quarterly reports, the group had booked losses of $9.8 billion and $5.1 billion respectively.
"We cut our second-quarter losses in half compared to the first quarter," Pandit said in a statement. "While there is still much to do, we are encouraged by our progress."
The bank has recorded over $56 billion in credit losses and write-downs in the last four quarters. Its share price has fallen nearly 70 percent since the credit market began to tighten.
In premarket trading Friday, Citigroup shares rose as high as $19.27, after closing Thursday at $17.97.
Pandit has put in motion sweeping asset sales to try to improve the company's balance sheet and free the bank of its more risky assets.
The group said on Friday that it sold an additional $99 billion of assets in the quarter, and two-thirds of them were investments made under Pandit's predecessor, Charles O. Prince III. The bank is also selling businesses like CitiCapital Diners Club International and its German retail banking unit.
Bank executives have said a recovery would take two to three years.
"This isn't like a sprint. This really is a marathon," Gary L. Crittenden, Citigroup's finance chief, said last week.
Wednesday, March 26, 2008
Citibank Launches Citigold Select for High Net Worth Clients
Citibank today announced the launch of its super premium offering Citigold Select, which provides high net worth affluent customers a holistic suite of both retail banking and wealth management products and solutions that include investments, insurance, mortgage, business banking, retirement planning, succession planning and wealth transfer.
Citigold Select builds further on Citibank's existing successful and leading proposition for high net worth customers, 'Citigold', which is extremely popular with the HNI customers. With Citigold Select, the Bank will specially cater to its top Citigold clients whose needs are increasingly getting more complex and specific, requiring a higher degree of specialization.
The needs of each client are taken care of by a dedicated and experienced Relationship Manager who is supported by Service Relationship Managers and the Citigold Select advisory team consists of Portfolio Counselors and a team of Investment, Insurance and Treasury Specialists. All of them work in partnership with the client to derive financial strategies that are customised to the client's financial goals.
Launching Citigold Select, Mr. T R Ramachandran, Head, Retail Banking, Citibank N. A., India said, "The launch of Citigold Select is in accordance with Citibank's strategy to offer superior products and services to meet the increasing aspirations of its sophisticated client segment. Our unique proposition stems not only from the depth of our expertise and our global capabilities, but also the breadth of our product range which is unrivalled in the affluent high net worth segment. We bring the best of retail banking and wealth management advisory to our clients, with products ranging from transactional accounts, mortgages, car loans, insurance, credit cards and investments, all the way through to trusts, managed accounts and private investment tranches unique to each individual client's requirements. The launch of Citigold Select is our latest initiative to add enhanced value to our clients."
According to Mr. Sameer Kaul, Head, Branch Banking, Citibank N. A., India, "The Citigold Select offering represents Citibank at its absolute best, bringing together unique global capabilities of Citi in products and services, and harnessing the best of technological innovation for every individual client. Our emphasis on the HNI segment demonstrates the growing sophistication of the Indian market and the increasingly complex needs and expectations of these individuals. The Citigold Select banking experience would ensure that clients' day-to-day banking and transactional needs are well taken care of - with seamless precision, within time, every time."
Citigold Select highlights:
-- Experienced and Senior Citigold Select Relationship Manager
-- Team of experts including portfolio counselors and expert research analysts
-- Quarterly investment research report "Standpoint"
-- Business Specialist to help create solutions that suit the financial needs of your business
-- Equity Brokerage and Advisory Services, brought to you by Citi Smith Barney
-- Citibank Ultima card
-- Jet Platinum credit card
--- Trust services
-- Art Advisory services
-- Exclusive meets and events across genres - business, financial and lifestyle
About Citi
Citi, the leading global financial services company, has some 200 million customer accounts and does business in more than 100 countries, providing consumers, corporations, governments and institutions with a broad range of financial products and services, including consumer banking and credit, corporate and investment banking, securities brokerage, and wealth management. Citi's major brand names include Citibank, CitiFinancial, Primerica, Smith Barney, Banamex, and Nikko. Additional information may be found at www.citigroup.com or www.citi.com.
Citigold Select builds further on Citibank's existing successful and leading proposition for high net worth customers, 'Citigold', which is extremely popular with the HNI customers. With Citigold Select, the Bank will specially cater to its top Citigold clients whose needs are increasingly getting more complex and specific, requiring a higher degree of specialization.
The needs of each client are taken care of by a dedicated and experienced Relationship Manager who is supported by Service Relationship Managers and the Citigold Select advisory team consists of Portfolio Counselors and a team of Investment, Insurance and Treasury Specialists. All of them work in partnership with the client to derive financial strategies that are customised to the client's financial goals.
Launching Citigold Select, Mr. T R Ramachandran, Head, Retail Banking, Citibank N. A., India said, "The launch of Citigold Select is in accordance with Citibank's strategy to offer superior products and services to meet the increasing aspirations of its sophisticated client segment. Our unique proposition stems not only from the depth of our expertise and our global capabilities, but also the breadth of our product range which is unrivalled in the affluent high net worth segment. We bring the best of retail banking and wealth management advisory to our clients, with products ranging from transactional accounts, mortgages, car loans, insurance, credit cards and investments, all the way through to trusts, managed accounts and private investment tranches unique to each individual client's requirements. The launch of Citigold Select is our latest initiative to add enhanced value to our clients."
According to Mr. Sameer Kaul, Head, Branch Banking, Citibank N. A., India, "The Citigold Select offering represents Citibank at its absolute best, bringing together unique global capabilities of Citi in products and services, and harnessing the best of technological innovation for every individual client. Our emphasis on the HNI segment demonstrates the growing sophistication of the Indian market and the increasingly complex needs and expectations of these individuals. The Citigold Select banking experience would ensure that clients' day-to-day banking and transactional needs are well taken care of - with seamless precision, within time, every time."
Citigold Select highlights:
-- Experienced and Senior Citigold Select Relationship Manager
-- Team of experts including portfolio counselors and expert research analysts
-- Quarterly investment research report "Standpoint"
-- Business Specialist to help create solutions that suit the financial needs of your business
-- Equity Brokerage and Advisory Services, brought to you by Citi Smith Barney
-- Citibank Ultima card
-- Jet Platinum credit card
--- Trust services
-- Art Advisory services
-- Exclusive meets and events across genres - business, financial and lifestyle
About Citi
Citi, the leading global financial services company, has some 200 million customer accounts and does business in more than 100 countries, providing consumers, corporations, governments and institutions with a broad range of financial products and services, including consumer banking and credit, corporate and investment banking, securities brokerage, and wealth management. Citi's major brand names include Citibank, CitiFinancial, Primerica, Smith Barney, Banamex, and Nikko. Additional information may be found at www.citigroup.com or www.citi.com.
Thursday, February 21, 2008
Citi Awarded 10-Year Contract by U.S. Department of Defense
Citi announced that it has been selected to administer the U.S. Department of Defense Travel Card program. The program, the largest under the General Services Administration's umbrella SmartPay(R) 2 master contract, currently has 1.2 million cardholders accounting for 61% of government-wide travel spending in 2007.
"Citi and the Agencies of the U.S. Federal Government have a long-standing, successful relationship, and we look forward to delivering value to the Department of Defense," said Paul Galant, CEO, of Citi's Global Transaction Services division. "We are committed to our government clients and will dedicate the necessary resources, capabilities and service they need to achieve their strategic goals now and in the future," he added. Global Transaction Services, which includes Citi's Commercial Card business, is one of Citi's strongest businesses with revenues of more than $7 billion in 2007. It is the leading issuer of commercial cards globally with over 2.1 million accounts.
Citi will immediately begin working with the Defense Travel Management Office (DTMO) and the DOD Service Commands to implement a program customized to meet their requirements, as well as to plan for an effective and smooth transition from the previous provider. The DTMO was established in 2006 to serve as the central point of contact for commercial travel within the DOD. It is responsible for establishing strategic direction and managing all commercial travel programs, including the travel card program. The new official travel cards will activate on Nov. 30, 2008.
The U.S. Department of Defense Service Commands covered under the new contract include: Army, Navy, Marine Corps, Air Force and approximately 20 other independent agencies. During fiscal year 2007, the program had a spend level of approximately $4.9 billion.
Global Transaction Services, a division of Citi Markets & Banking, offers integrated cash management, trade, and securities and fund services to multinational corporations, financial institutions and public sector organizations around the world. With a network spanning over 100 countries, Citi's Global Transaction Services supports over 65,000 clients. As of the 4th quarter of 07, it held on average $245 billion in liability balances and $13.1 trillion in assets under custody.
Citi, the leading global financial services company, has some 200 million customer accounts and does business in more than 100 countries, providing consumers, corporations, governments and institutions with a broad range of financial products and services, including consumer banking and credit, corporate and investment banking, securities brokerage, and wealth management. Citi's major brand names include Citibank, CitiFinancial, Primerica, Smith Barney, Banamex, and Nikko. Additional information may be found at www.citigroup.com or www.citi.com.
Certain statements in this document are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act. These statements are based on management's current expectations and are subject to uncertainty and changes in circumstances. Actual results may differ materially from those included in these statements due to a variety of factors. More information about these factors is contained in Citigroup's filings with the Securities and Exchange Commission.
"Citi and the Agencies of the U.S. Federal Government have a long-standing, successful relationship, and we look forward to delivering value to the Department of Defense," said Paul Galant, CEO, of Citi's Global Transaction Services division. "We are committed to our government clients and will dedicate the necessary resources, capabilities and service they need to achieve their strategic goals now and in the future," he added. Global Transaction Services, which includes Citi's Commercial Card business, is one of Citi's strongest businesses with revenues of more than $7 billion in 2007. It is the leading issuer of commercial cards globally with over 2.1 million accounts.
Citi will immediately begin working with the Defense Travel Management Office (DTMO) and the DOD Service Commands to implement a program customized to meet their requirements, as well as to plan for an effective and smooth transition from the previous provider. The DTMO was established in 2006 to serve as the central point of contact for commercial travel within the DOD. It is responsible for establishing strategic direction and managing all commercial travel programs, including the travel card program. The new official travel cards will activate on Nov. 30, 2008.
The U.S. Department of Defense Service Commands covered under the new contract include: Army, Navy, Marine Corps, Air Force and approximately 20 other independent agencies. During fiscal year 2007, the program had a spend level of approximately $4.9 billion.
Global Transaction Services, a division of Citi Markets & Banking, offers integrated cash management, trade, and securities and fund services to multinational corporations, financial institutions and public sector organizations around the world. With a network spanning over 100 countries, Citi's Global Transaction Services supports over 65,000 clients. As of the 4th quarter of 07, it held on average $245 billion in liability balances and $13.1 trillion in assets under custody.
Citi, the leading global financial services company, has some 200 million customer accounts and does business in more than 100 countries, providing consumers, corporations, governments and institutions with a broad range of financial products and services, including consumer banking and credit, corporate and investment banking, securities brokerage, and wealth management. Citi's major brand names include Citibank, CitiFinancial, Primerica, Smith Barney, Banamex, and Nikko. Additional information may be found at www.citigroup.com or www.citi.com.
Certain statements in this document are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act. These statements are based on management's current expectations and are subject to uncertainty and changes in circumstances. Actual results may differ materially from those included in these statements due to a variety of factors. More information about these factors is contained in Citigroup's filings with the Securities and Exchange Commission.
Sunday, November 11, 2007
Mallya foraying into luxury retail segment soon
Indian business mogul Vijay Mallya has set his sights on the booming retail sector, especially the luxury segment, and is planning to sell products of international fashion brands like Louis Vuitton, Gucci, Mont Blanc and Dunhill.
The first retail mall will be located in Mallya's UB City complex, coming up in the heart of India's silicon hub, with an upfront investment of Rs.3 billion ($76 million).
"The luxury retail showroom, christened The Collection will initially have 38 stores and 23 foreign and Indian brands. It will be opened during the first quarter of 2008 when the multibillion rupee UB City project gets completed," UB Global CEO Shashikanth told IANS.
The UB City, a premium property in the central business district bang opposite the city's famous Cubbon Park, is a joint initiative of Mallya's holding firm and Prestige group, a leading property developer in Bangalore.
UB Holding has 55 percent equity in the project, while Prestige holds the remaining 45 percent stake.
Spread over 1.5 million sq ft, with an upper crust shopping plaza, the mega complex will also have a luxury hotel, deluxe serviced apartments, penthouses, offices, food courts, banks, pubs, beauty parlours and retail outlets.
Among the 10 global brands, which have signed up with UB to set up their exclusive designer outlets, are Louis Vuitton and Mont Blanc of France, Gucci of Italy and Dunhill of Britain.
Prestige chairperson and managing director Irfan Razack Tuesday said the luxury retail foray, a brainchild of Mallya, will be a value proposition to the upcoming premium property in downtown Bangalore.
"UB City is set to become a new landmark in the IT hub and will become as popular as Petronas Towers in Kuala Lumpur, Malaysia. The Collection is aimed at drawing high net-worth individuals and the neo-rich geeks of the knowledge sector," Razack pointed out.
The Venetian-style complex will house a 250-room JW Marriot hotel and offices of multinationals such as Citigroup, Toyota, ABN Amro, 3M, Ernst & Young, and Yahoo!
A recent study by global consulting firm McKinsey estimated that India's retail sector would quadruple to $1.5 trillion by 2025.
"As a city with the highest number of billionaires in the country, Bangalore will be a launch pad for global luxury retail brands to showcase their products and hard sell them," Shashikant added.
According to the federation of Indian chamber of commerce (Ficci), the nascent luxury market in the subcontinent is estimated to be around $2 billion currently, growing at 20 percent annually, thanks to the nine percent GDP-driven economy.
Indo-Asian News Service
The first retail mall will be located in Mallya's UB City complex, coming up in the heart of India's silicon hub, with an upfront investment of Rs.3 billion ($76 million).
"The luxury retail showroom, christened The Collection will initially have 38 stores and 23 foreign and Indian brands. It will be opened during the first quarter of 2008 when the multibillion rupee UB City project gets completed," UB Global CEO Shashikanth told IANS.
The UB City, a premium property in the central business district bang opposite the city's famous Cubbon Park, is a joint initiative of Mallya's holding firm and Prestige group, a leading property developer in Bangalore.
UB Holding has 55 percent equity in the project, while Prestige holds the remaining 45 percent stake.
Spread over 1.5 million sq ft, with an upper crust shopping plaza, the mega complex will also have a luxury hotel, deluxe serviced apartments, penthouses, offices, food courts, banks, pubs, beauty parlours and retail outlets.
Among the 10 global brands, which have signed up with UB to set up their exclusive designer outlets, are Louis Vuitton and Mont Blanc of France, Gucci of Italy and Dunhill of Britain.
Prestige chairperson and managing director Irfan Razack Tuesday said the luxury retail foray, a brainchild of Mallya, will be a value proposition to the upcoming premium property in downtown Bangalore.
"UB City is set to become a new landmark in the IT hub and will become as popular as Petronas Towers in Kuala Lumpur, Malaysia. The Collection is aimed at drawing high net-worth individuals and the neo-rich geeks of the knowledge sector," Razack pointed out.
The Venetian-style complex will house a 250-room JW Marriot hotel and offices of multinationals such as Citigroup, Toyota, ABN Amro, 3M, Ernst & Young, and Yahoo!
A recent study by global consulting firm McKinsey estimated that India's retail sector would quadruple to $1.5 trillion by 2025.
"As a city with the highest number of billionaires in the country, Bangalore will be a launch pad for global luxury retail brands to showcase their products and hard sell them," Shashikant added.
According to the federation of Indian chamber of commerce (Ficci), the nascent luxury market in the subcontinent is estimated to be around $2 billion currently, growing at 20 percent annually, thanks to the nine percent GDP-driven economy.
Indo-Asian News Service
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