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Informist, Wednesday, Jun. 3, 2026

 

By Aaryan Khanna

 

MUMBAI – Citi's commercial banking division has seen a slowdown in lending growth due to the West Asia war. However, small and medium enterprises borrowing from the bank have so far not shown signs of deteriorating asset quality or delay in paying back loans, several of the bank's executives told Informist on the sidelines of the Citi India Conference 2026. 

 

"So far, the damage of the West Asia war has been localised," a senior executive of the bank's India operations said. "Clients have not come to us asking for extensions on payment periods or showing any signs that they will be unable to repay because of the effects of the war."

 

The US bombed Iran and killed its top leadership on Feb. 28, leading to the effective closure of the Strait of Hormuz. A rise in prices of crude oil and several other key raw materials has driven down the margins of India's small and medium companies. Signs of distress have not resulted in an accretion of bad loans to the global lender yet, even as the demand for fresh credit has so far been dull.

 

Clients and bankers across geographies have congregated in Mumbai for the bank's flagship annual summit in India. Clients are diversifying supply chains, which initial led to a rise in working capital loans and an initial hit to revenues. However, several corporates have now managed to divert supply chains or sales. 

 

Moreover, even among small and medium enterprises, Citi's commercial banking client base is among larger companies rather than start-ups. These have had better buffers to deal with the fallout of the persistent trade disruption, the bankers said. Citi has also advised clients on more efficient ways to reroute operations in order to ensure revenues are least affected.

 

"We are willing to provide support at this time, obviously, if required," another executive said. "But we cherry pick our clients, they would have really strong balance sheets and a little bit more wiggle room when such a crisis hits."  End

 

Edited by Avishek Dutta

 

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