India's one of the leading private sector banks Axis Bank on March 30 announced the acquisition of Citibank’s India consumer business for ₹12,325 crore.
Axis would pay Citi an additional ₹1,500 crore over the next two years to help the transition process, chief executive Amitabh Chaudhry said. The bank will gain access to 7 offices, 21 branches and 499 ATMs across 18 cities.
In a post-market hour regulatory filing, Axis Bank said its "board of directors at their meeting held on March 30, 2022, have approved the purchase of the Citibank’s India Consumer Business from Citibank N.A., acting through its branch in India, (CBNA) and the NBFC Consumer Business from Citicorp Finance (India) (CFIL), as going concerns."
The transaction comprises the sale of the consumer businesses of Citibank India, which include credit cards, retail banking, wealth management and consumer loans. The 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.
"The acquisition of CBNA Undertaking and CFIL Undertaking will help strengthen Axis Bank’s retail banking franchise and accelerate Axis Bank’s growth ambitions across various consumer banking segments. Post the acquisition, Axis
Bank will have nearly 2.85 crore savings accounts, and more than 2.3 lakh Burgundy customers and 1.06 crore cards," the bank said.
Burgundy savings account is a premium account offered by Axis Bank with personalised banking services.
As per Axis Bank, the acquired portfolio would increase Axis Bank’s credit card customer base by nearly 31 percent with an additional 25 lakh cards, which will in turn bolster the cards' balance sheet position to be amongst the top three players in the Indian market.
Moreover, the wealth and private banking portfolio will add great value to the Axis Burgundy business, further accelerating its growth ambitions in that segment. On an overall basis, the proposed transaction will add nearly 7 percent to the Bank’s deposit base (with a nearly 12 percent increase in CASA- current account savings accounts) and nearly 4 percent increase in advances, Axis Bank said.