Axis Bank on Wednesday completed the acquisition of Citibank’s retail business in India for Rs 11,603 crore in cash— less than the sum of Rs 12,325 crore it was expected to pay when the deal was announced a year ago.
The transaction will be funded from internal accruals. While the sale excludes Citi’s institutional client businesses, it covers the American bank’s consumer businesses in India— spanning loans, credit cards, wealth management and retail banking.
India’s third largest private sector bank said the deal would strengthen its market position by bringing a high-quality portfolio of 18 lakh cardholders, with industry-leading transaction and spends per card. It will bring into its fold Rs 39,900 crore of aggregate deposits, of which 77 per cent is low cost current account and saving accounts (CASA).
The bank will gain access to 1,600 Suvidha corporate relationships which is expected to strengthen its salary business. The lender will add a large wealth franchise, including total asset under management (AUM) comprising wealth management and private banking of Rs 94,700 crore, across Citi products such as Citigold Private, Citigold, Citi Priority and Citi Private Bank customers.
The deal also includes the sale of the consumer business of Citi’s non-banking financial company, Citicorp Finance (India) Limited, comprising asset-backed financing business, which includes commercial vehicle and construction equipment loans as well as the personal loans portfolio.
Speaking to the press on Wednesday, Axis Bank managing director and chief executive Amitabh Chaudhry said 2.4 million Citi customers in the country have agreed to bank with Axis Bank after the deal against 3 million at the time of announcing the deal.
He said 96 per cent or 3,200 of the Citi employees have joined the bank. Chaudhry disclosed that the entire integration will happen over the next 18 months. He pointed out that the bank will see a hit of Rs 1,500 crore as implementation costs which will be amortised.
Axis Bank is the fourth-largest issuer of credit cards with a total base of 8.6 million cards and the deal.
