Axis Bank has acquired the retail assets of Citi India after a month-long bidding process for a cash consideration of ₹12,325 crore ($1.6 billion). The acquisition deal will bring around three million new customers to the Indian lender's clientele over from the American banking major.
The deal encompasses Citi's lucrative credit cards business, with around 2.5 million cardholders, which will enhance Axis Bank’s credit card customer base by around 31%. The bank's cards balance sheet will grow by 57% after the acquisition, making it one of the top three card businesses in the country.
Axis Bank will also acquire Citi India's deposits, wealth management, loans, customer guarantees, insurance distribution and small banking verticals in India.
The acquisition deal 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, it further added.
This Axis-Citi deal, however, does not include the latter's institutional client businesses in India.
"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," said Ashu Khullar, CEO, Citi India
Post the deal, Axis Bank will get additional aggregate deposits worth ₹50,200 crore, of which 81% are CASA deposits. On an overall basis, the proposed transaction will add 7% to the bank’s deposit base, with around 12% increase in CASA, and 4% increase in advances.
In the wealth management segment, the deal will bring around ₹1.11 lakh crore AUM from Citi's wealth and private banking products to Axis’ Burgundy premium banking brand, making it the third largest segment player in terms of combined AUM.
After the acquisition, Axis Bank will have around 28.5 million savings accounts, over 2.3 lakh Burgundy customers and 10.6 million cards. It will also gain access to seven offices, 21 branches and 499 ATMs across 18 cities.
Axis Bank will absorb 3,600 Citibank employees once the acquisition is completed. The deal is expected to be closed within 12 months, subject to the satisfactory completion of the customary and contractual conditions.
"We look forward to collaborating with Citi’s experienced senior leadership team and diverse talent pool, as they join Axis’ over 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 that will help drive synergy realization and our GPS objectives," said Amitabh Chaudhry, MD and CEO, Axis Bank.
Citi sold its retail assets in the country under CEO Jane Fraser's plan to exit retail banking space in India and 12 other markets where it lacks the necessary scale to compete in a bid to overhaul its business.
