Private sector lender Axis Bank on Wednesday acquired Citigroup's retail banking business in India for Rs 12,325 crore. The acquisition is subject to customary closing conditions, including receipt of regulatory approvals, the bank said in a regulatory filing, adding that it expects the requisite approvals in 9-12 months.
The transaction comprises sale of consumer business of Citibank India, which includes credit cards, retail banking, wealth management and consumer loans, Axis Bank stated. The deal also includes sale of consumer business of Citi’s non-banking financial company, Citicorp Finance (India) Limited, comprising the asset-backed financing business, which includes commercial vehicle and construction equipment loans, as well as personal loans portfolio.
Post the acquisition of approximately 30 lakh unique customers of Citibank India, Axis Bank will have approximately 2.85 crore savings accounts, over 2.3 lakh Burgundy customers and 1.06 crore cards.
Further, the acquired portfolio would increase Axis Bank’s credit card customer base by approximately 31 per cent with an additional 25 lakh cards, which will in turn bolster the bank's cards balance sheet position to be amongst the top three players in the Indian market, the lender added. It also said that the wealth and private banking portfolio will add great value to the Axis Burgundy business.
On an overall basis, the proposed transaction will add around 7 per cent to the bank’s deposit base (with approximately 12 per cent increase in Current Account Savings Account (CASA) and around 4 per cent increase in advances.
With all the required capabilities in place, Axis Bank expects successful integration across all key parameters including about 3,600 employees, customers, product offerings and technology in a value accretive manner. "Additionally, the deal offers strategic advantages to the bank such as premiumization of its overall customer portfolio, increased opportunities to cross-sell its products and accelerated digital transformation,"
Axis Bank said that Citibank’s customers will continue to avail all the rewards, privileges, and offers to which they were previously entitled, adding that they will specifically benefit from Axis Bank’s wider geographical reach and comprehensive service offerings, along with One Axis capabilities that extend across all its subsidiaries.
The lender's digital banking and Axis Mobile app offering 250+ services will be added and the Citi Phone Banking will also exist for customers of both the banks. The bank will gain access to 7 offices, 21 branches and 499 ATMs across 18 cities.
Commenting on the acquisition, Amitabh Chaudhry, MD&CEO, Axis Bank said, “...This is a significant milestone in Axis’ journey of growth and leadership and will bring in great value for all stakeholders... We look forward to collaborating with Citi’s experienced senior leadership team and diverse talent pool, as they join Axis’ 86,000+ strong, dedicated workforce.".
"Given the expertise that Citi employees bring to the table, we view them as a significant addition to our existing team that will help drive synergy realization and our GPS objectives. We welcome all employees to the Axis Family and together we will serve our customers ‘Dil Se’," he added.
Citi India CEO, Ashu Khullar said, “We are extremely pleased with this outcome for our consumer colleagues and clients. Axis Bank is committed to building its consumer banking business in India and is backed by a strong market presence. We believe Axis Bank will provide our employees an excellent environment to build their careers and shall meet all the financial needs of our consumer clients. We continue to remain committed to contributing to India’s growth and development as we deepen our presence through our institutional businesses and our community initiatives. Citi will also continue to harness India’s rich talent pool in the areas of Technology, Operations, Analytics, Finance and allied functional areas through its network of Citi Solution Centers that are located in five cities in India and support our global businesses.”
Citi had last year said that it would exit its consumer franchises in 13 markets, including India, as it refocuses on its more lucrative institutional and wealth management businesses. Its Indian consumer banking business comprises credit cards, home loans and retail banking.
Citigroup had entered India in 1902 and started the consumer banking business in 1985.
Apart from the institutional banking business, Citigroup in India will continue to focus on offshoring or global business support rendered from centres in Mumbai, Pune, Bengaluru, Chennai and Gurugram.
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