Citigroup Inc.'s partnership with Indian mobile payments company Paytm to launch a credit card is credit positive for the U.S. banking group, Moody's said.
The rating agency said May 20 that the partnership is consistent with Citi's global consumer strategy to maintain a light physical footprint, but strong digital capabilities to enhance client engagement and respond to changing consumer payment behavior.
Moody's does not expect the partnership to disrupt the Indian credit card market, but it believes it should accelerate growth in Citi's Indian consumer portfolio.
The rating agency noted that India has been a small portion of Citi's international consumer bank, comprising US$7.1 billion of US$114.1 billion in international consumer loans at the end of the first quarter.
The rating agency said it expects Citi to maintain strong risk and pricing discipline to protect the net credit margins as it grows this portfolio.