HDFC stake sale:Citi records $160-mn pre-tax gains

Citigroup has earned a pre-tax profit of $160 million by selling 1.5 per cent of its stake in Housing Development Finance Corporation.

The foreign bank had earlier pared its holding in the housing finance company from 11.4 per cent to 9.9 per cent.

"This transaction was motivated by our capital planning, as we prepare for the implementation of Basel III, rather than strategic consideration," John Gerspach, chief financial officer, Citigroup, said in a statement.

Citi, however, clarified it had no immediate plans to sell its remaining 9.9 per cent stake in HDFC. Despite selling its stake, Citi continues to remain the

single largest institutional shareholder in HDFC.

"Citi has categorically told us it does not intend to sell its remaining stake in HDFC immediately. Though there are some temporary concerns over India's economic growth because of high inflation, India still appears an attractive investment destination for overseas institutional investors," said Keki Mistry, vice chairman and chief executive officer, HDFC.

Citigroup, an investor in HDFC since 2005, held 11.4 per cent stake in India's largest mortgage lender through Citigroup Strategic Holdings Mauritius and Citigroup Holdings Mauritius.

"Citi remains deeply committed to India and we continue to invest in our franchise in this very important market," said Pramit Jhaveri, chief executive officer, Citi, India.