Citibank’s consumer business in India merger with Axis Bank would result in further consolidation in the consumer banking space, especially for the credit and charge cards, data and analytics company GlobalData said in a report.
On March 1, 2023, Axis Bank announced that it has closed the acquisition of the consumer businesses of Citibank India and its non-banking finance arm, Citicorp Finance (India) Ltd for a total amount of Rs 11,603 crore ($1.41 billion). In March 2022, when the deal was announced, Axis Bank said it would pay Rs 12,325 crore for the acquisition deal.
Citibank India too announced on its website that its consumer banking customers will now be served by Axis Bank.
The deal comprises the consumer businesses of Citibank India, which include loans, credit cards, wealth management, and retail banking operations.
Besides, it also includes Citicorp Finance (India) Ltd., which covers asset-backed financing business, including commercial vehicle and construction equipment loans as well as personal loans.
According to GlobalData, the credit and charge card market in India is dominated by the top four players — HDFC Bank, ICICI Bank, State Bank of India (SBI), and Axis Bank, which together control two-third of the market in terms of cards in circulation.
Before March 2022, Axis Bank held a 12.2 per cent, post-acquisition of Citibank, its share has risen to 14.4 per cent by March 2023, the report said.
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“The acquisition complements Axis Bank’s credit card business, which is expected to witness around 20 per cent rise in customer base, thereby further strengthening its position in the market,” said Ravi Sharma, banking and payments analyst at GlobalData.
Following the deal was completed, the third-largest private sector lender said the acquisition comes with a quality credit card franchise with one of the highest wallet shares in premium cards that is complementary and consolidates Axis’ position in the cards business. The bank said it expects its market share to improve from 11.4 per cent to 16.2 per cent.
Besides, the acquired portfolio would also boost the Axis Bank’s credit card customer base by 19 per cent, with an addition of 1.8 million cards, it added.
Through the acquisition, Axis Bank onboarded 3,200 employees trained in global best practices and experienced leadership with deep domain expertise.
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The Indian credit and charge card market, which was hit during the pandemic period, is back on a growth trajectory on the back of steady economic growth, a rise in consumer spending, growing digital literacy among consumers, and the government’s digital push. The GlobalData’s report said that the total credit and charge card payments value in India is expected to register a compound annual growth rate (CAGR) of 23.9 per cent to reach Rs 32.5 lakh crore by 2026.
