Axis Bank acquires Citi’s consumer business in India for $1.6 bn

Axis Bank, the third largest private sector lender in the country, will buy the consumer banking business of Citi in a deal valued at $1.6 billion which paid in cash. The deal includes Citi’s credit cards, retail banking, wealth management and consumer loan, Citi said in a statement.

“The transaction also includes the sale of the 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 the personal loans portfolio,” the statement said. Axis was selected by Citi following an extensive and competitive auction process.

“It excludes Citi’s institutional client businesses in India,” the statement said adding Citi remains committed and focused on serving institutional clients in India and globally.

Citibank India serves 2.9 million retail customers with 1.2 million bank accounts and caters to 3,000 corporate clients.

The transaction will also include approximately 3,600 Citi employees supporting the consumer businesses in India, who will transfer to Axis upon completion of the proposed transaction.

The transaction is expected to close in the first half of calendar year 2023 subject to requisite regulatory approvals, Citi said.

“Our announced transaction with Axis, a leader in Indian financial services, represents an important milestone for our franchise and offers an excellent opportunity to our consumer banking colleagues in India. As we move forward with this transaction, India remains a key institutional market for Citi,” Peter Babej, Citi Asia Pacific CEO, said.

Last year, the global banking behemoth announced exit from its consumer banking franchises in 13 markets across Asia and EMEA which was expected to release approximately US$7 billion of allocated tangible common equity over time.

One of the key attractions for Axis Bank was the Citi’s credit card business. Average spends per card for Citibank remains 1.4 times higher than the industry average.

Axis Bank, which has a credit card base of 8.6 million, will add another 2.55 million from Citi after acquisition.

Amitabh Chaudhry, MD&CEO, Axis Bank said: “We are delighted with the addition of an enviable retail franchise and a high-quality talent pool as we continue our journey towards becoming a premier financial services brand. This is a significant milestone in Axis’ journey of growth and leadership and will bring in great value for all stakeholders. The amplified scale and width of offerings, the diversified portfolio of products and global best practices will enhance customer experience, while greater synergies both on revenue and cost side will augment value for the new franchise.

“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. Axis Bank already has a rich network of Citi alumni across the hierarchy, which reflects cultural alignment between the two organizations. Given the expertise that Citi employees bring to the table, we view them as a significant addition to our existing team.”