Citigroup to Target South African Government Contracts With Credit Cards

Citigroup Inc., the U.S. bank with 200 million customer accounts, said it will target South Africa’s government and large companies in the country, including Rio Tinto Plc, to use its commercial credit cards.

“We’ll aggressively bid for any government tenders,” Donna Oosthuyse, managing director of Citigroup in South Africa, told reporters in Johannesburg today. Commercial cards, which companies give to employees to cover business expenses, are “going live” at the South African unit of Rio Tinto, the world’s third-largest mining company, according to Citigroup.

South Africa is the 50th country to take delivery of Citigroup’s commercial credit cards with services planned in United Arab Emirates, Turkey, Greece, Luxembourg and New Zealand by the end of the year, said Manish Kohli, head of wholesale cards for Citigroup’s Europe, Middle East and Africa unit.

Government departments in South Africa will be able to immediately track payments if they used Citigroup cards, according to the bank. Finance Minister Pravin Gordhan has accused some government departments of wasteful spending and complained about World Cup soccer tickets being bought by departments.

The commercial credit card roll-out is a way for Citigroup to service local and global clients, with the bank seeing “increasing flows” into Africa, especially South Africa, said Rajesh Mehta, the head of the lender’s treasury and trade solutions business for EMEA.

The bank won’t take market share from competitors, Mehta said, adding that the size of the “pot” will grow in Africa’s largest economy for Citigroup and its rivals, such as American Express Co.

Citigroup, which received a $45 billion government bailout in 2008, is the world’s tenth-largest bank by market value. The shares dropped 7 cents, or 1.7 percent, to close at $4.09 in New York Stock Exchange composite trading yesterday.

To contact the reporter on this story: Renee Bonorchis in Johannesburg at rbonorchis@bloomberg.net

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