The deal envisages transfer of credit cards, retail banking, wealth management and consumer credit institutions
The deal envisages transfer of credit cards, retail banking, wealth management and consumer credit institutions
India’s third-largest private sector bank Axis Bank Ltd on Wednesday said it will acquire Citibank’s consumer businesses in India, which include credit cards, retail banking, wealth management and consumer loans, for $1.6 billion (₹12,325 crore). In.
The deal also includes the sale of the consumer business of Citi’s non-banking financial company, Citicorp Finance (India) Ltd. This entity includes the asset-backed financing business, which includes commercial vehicle and construction equipment loans, as well as personal loans. Department.
Citi employees numbering 3,600 and supporting consumer businesses 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 to issue approximately $800 million of allocated tangible common equity as a result of the transaction, the company said in a statement.
The acquisition is subject to customary closing conditions, which include obtaining regulatory approval.
“Axis Bank sees this acquisition as a healthy strategic fit. It will gain access to Citibank’s large and affluent customer franchise, which has a bouquet of fee-oriented and profitable segments, including quality credit card portfolio, rich wealth management customers, meaningful deposits with 81 per cent CASA, as well as a strong consumer base. loan is included. portfolio,” the bank said in a statement.
Post the acquisition, Axis Bank will have 28.5 million savings accounts, over 2.3 lakh ‘Burgundy’ customers and 10.6 million cards.
The proposed transaction will increase Axis Bank’s deposit base by 7% (compared with 12 percent growth in CASA) and advances by 4%.
Citibank customers can continue to avail all the rewards, privileges and offers to which they were earlier entitled. Amitabh Choudhary, MD & CEO, Axis Bank said, “This is an important milestone in Axis’s growth and leadership journey and will bring great value to all stakeholders.”
“The wider scale and breadth of the offerings, diverse portfolio of products and global best practices will enhance the customer experience, while greater synergy in both revenue and cost will increase value for new franchisees,” he added.
Ashu Khullar, CEO, Citi India, said, “We are confident that Axis Bank will provide our employees with an excellent environment to build their careers and meet all the financial needs of our consumer customers.”