The Competition Commission of India (CCI) on Tuesday approved private lender Axis Bank’s proposed acquisition of Citigroup’s Indian consumer banking businesses for Rs 12,325 crore.
Back in March, US bank Citigroup announced the sale of its consumer banking businesses, including credit cards, retail banking, wealth management, and consumer loans to Axis Bank as part of its plans to exit retail operations in 13 markets.
The deal, which is expected to close in the first half of the 2023 calendar year, will include the transfer of about 3,600 Citi employees to Axis. The sale excludes Citi’s institutional client businesses in India.
Axis Bank is the fourth-largest issuer of credit cards with a total base of 86 lakh cards and the deal will add about 25 lakh credit cardholders, making it one of the top three card businesses in the country, the private lender said in a separate statement.
Axis, which has a retail book of nearly Rs 4 lakh crore, will acquire about 30 lakh unique customers of Citibank India, seven offices, 21 branches, and 499 ATMs across 18 cities.
Citi’s loan book is worth nearly Rs 68,000 crore, of which retail loans account for Rs 28,000 crore. With 12 lakh bank accounts, the total India business contributes 1.5 percent in profit to the lender’s global book.
Citibank, under its first woman CEO Jane Fraser, decided to exit the 13 markets to conserve capital and focus on higher-yielding revenue streams. Citi entered India in 1902 and started its consumer banking business in 1985.
Apart from the institutional banking business, it will continue to focus on offshoring or global business support rendered from centres in Mumbai, Pune, Bengaluru, Chennai, and Gurugram.
For the fiscal year that ended on March 31, 2021, Citibank India reported a net profit of Rs 4,093 crore, down from Rs 4,918 crore in the preceding fiscal year. It has 35 branches across the country.
As of March 31, 2021, the bank’s concentration of non-performing assets (NPAs) stood at Rs 143.34 crore, involving exposure to top-four NPA (non-performing asset) accounts.
While the gross NPAs stood at Rs 990.94 crore. Its retail bank serves people across the spectrum, including the salaried and the high net worth individuals, through dedicated offerings.
First Published: IST