Bengaluru: Private Lenders axis Bank Citigroup is buying Inc.’s local consumer banking arm for $1.6 billion to grow its credit card business.
sell by City The move is part of chief executive Jane Fraser’s effort to overhaul its business by exiting retail banking operations in 13 countries where it doesn’t have the scale necessary to compete.
Citi was one of the first international lenders to introduce credit cards for Indians in 1987, but according to Macquarie, its market share has declined from 13% a decade ago to 4%.
Still, Axis will benefit from the deal as it has access to 2.6 million Citi cards, which on average spend more than cards from rival Indian banks.
As part of the sale, 3,600 Citi employees will move to Axis. The deal follows a month-long auction process that involved rival bidding from Kotak Mahindra Bank.
Interest in Citi’s assets underscores Indian banks’ growing appetite for businesses such as credit cards and mortgages that can help lock in long-term earnings growth.
The sale is expected to close in the first half of next year and does not include Citi’s institutional client businesses in India.
Citigroup previously issued a statement on the sale, which the bank later asked news distributor BusinessWire to withdraw because it was issued prematurely. BusinessWire said it was not aware of any irregularities.
Citi did not respond to a request for comment. Axis announced the deal separately on the Bombay Stock Exchange.
sell by City The move is part of chief executive Jane Fraser’s effort to overhaul its business by exiting retail banking operations in 13 countries where it doesn’t have the scale necessary to compete.
Citi was one of the first international lenders to introduce credit cards for Indians in 1987, but according to Macquarie, its market share has declined from 13% a decade ago to 4%.
Still, Axis will benefit from the deal as it has access to 2.6 million Citi cards, which on average spend more than cards from rival Indian banks.
As part of the sale, 3,600 Citi employees will move to Axis. The deal follows a month-long auction process that involved rival bidding from Kotak Mahindra Bank.
Interest in Citi’s assets underscores Indian banks’ growing appetite for businesses such as credit cards and mortgages that can help lock in long-term earnings growth.
The sale is expected to close in the first half of next year and does not include Citi’s institutional client businesses in India.
Citigroup previously issued a statement on the sale, which the bank later asked news distributor BusinessWire to withdraw because it was issued prematurely. BusinessWire said it was not aware of any irregularities.
Citi did not respond to a request for comment. Axis announced the deal separately on the Bombay Stock Exchange.