Axis Bank is all set to acquire Citi India’s retail assets for $2 billion, according to sources. The retail business of Citi India includes credit cards, wealth management and retail customer accounts. This deal, where Axis Bank is set to acquire Citi’s consumer business in India, will have milestone-linked payments. The private sector lender will formally announce this decision on Wednesday, March 30, as per the sources.
According to the sources quoted by CNBC-TV18, Citi Bank may continue to service its customers during the integration period, so that the transition goes on seamlessly and no account holder is affected in the process. The deal will include Citi’s lucrative customer base of 2.6 million credit card holders.
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Axis Bank on the day said it will hold a press conference at 4:15 pm on Monday, after market hours, while Citi declined to comment on the report. Citi Asia Pacific CEO Peter Babej has reportedly landed in Mumbai last evening and is likely to be present during the announcement.
As mentioned earlier, under the second part of the transaction deal with Axis Bank, Citi will continue its service to customers for a period of about 12 to 18 months, Financial Express reported. In the first part of the Citi-Axis deal, the same will become effective after six months from the date of announcement. The payment will be done based on current metrics of business. Under the second part of the deal, which is the larger part of the transaction, a service agreement will be formed to provide seamless services to Citi customers in India.
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In April last year, the American banking major had announced its plan to exit from the consumer banking business in as many as 13 countries to focus on four wealthy areas including Singapore, Hong Kong, the United Arab Emirates and London. Citigroup’s India business was axed as part of this announcement. “As a result of the ongoing refresh of our strategy, we have decided that we are going to double down on wealth. We will operate our consumer banking franchise in Asia and EMEA solely from four wealth centres, Singapore, Hong Kong, UAE and London,” the groups new global CEO Jane Fraser had said.
As of March 31 last year, Citi had borrowings of Rs 68,747 crore in India, while its deposits amounted to Rs 1.66 trillion. As per data from the Reserve Bank of India, the lender’s credit card numbers stood at 2.55 million as of February.
Axis Bank was given the nod to acquire Citigroup’s retail business in India after it beat its rival Kotak Group, which had reportedly shown a “more aggressive” behaviour and also placed a bid lower than Axis. The final call was also taken after considering other factors such as competition concerns and job security of present Citi employees in India among others.
Citigroup’s India business comprises credit cards, retail banking, home loans and wealth management. The bank has as many as 35 branches in the country and has an employee base of about 4,000 people in the consumer banking business here. 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, as per PTI.
