The agreement provides for the transfer of credit card, retail banking, wealth management and consumer lending institutions
The agreement provides for the transfer of credit card, retail banking, wealth management and consumer lending institutions
Axis Bank Ltd, India’s third-largest private sector bank, announced on Wednesday that it will acquire Citibank’s consumer business in India, which includes credit cards, retail banking, wealth management and consumer lending, for US$1.6 billion (£12,325 million). .
The transaction also includes the sale of the consumer business of Citicorp Finance (India) Ltd., Citi’s non-bank finance business. This unit includes the asset-backed financing business, which includes commercial vehicle and construction equipment loans as well as the personal loan portfolio.
3,600 Citi employees supporting consumer operations in India will be transferred to Axis. The transaction is expected to close in the first half of calendar year 2023.
Upon closing, Citi expects the transaction to result in the release of approximately $800 million in allocated tangible common equity, the company said in a statement.
The acquisition is subject to customary closing conditions, including receipt of regulatory approvals.
“Axis Bank sees this acquisition as a healthy strategic fit. It gains access to Citibank’s large and affluent client franchise with a bouquet of fee-driven and profitable segments, including a high-quality credit card portfolio, an affluent wealth management clientele, significant deposits, 81% of which are CASA, and a strong consumer lending portfolio,” the bank said in a statement .
After the takeover, Axis Bank will have 28.5 million savings accounts, over 2.3 lakh “Burgundy” customers and 10.6 million cards, it said.
The proposed transaction will increase Axis Bank’s deposit base by 7% (with a 12% increase in CASA) and deposits by 4%.
Citibank customers can continue to take advantage of all the rewards, privileges and offers to which they were previously entitled. Amitabh Chaudhry, MD and CEO of Axis Bank said, “This is a significant milestone in Axis’ growth and leadership journey and will bring great value to all stakeholders.”
“The increased scale and breadth of offering, diversified product portfolio and global best practices will enhance the customer experience, while greater synergies on both revenue and cost sides will drive value for the new franchise,” he said.
Ashu Khullar, CEO of Citi India said, “We believe that Axis Bank will provide our employees with an excellent environment to build their careers and meet all the financial needs of our consumer clients.”
