Axis Bank on Wednesday announced its proposed acquisition of Citibank’s consumer banking businesses in India for ₹12,325 crore.
According to Standard and Poor's (S&P), Axis Bank's acquisition of Citigroup Inc's consumer banking portfolio in India will only result in significant profitability gains starting in FY2025.
The acquisition and integration of the assets will take time. According to S&P, the transaction is expected to be completed in the next 9 to 12 months, with full integration taking another 18 months.
The Citi transaction would help Axis since it gives them access to 2.6 million Citi cards, which have a greater average expenditure than cards from competing Indian banks.
As part of the sale, 3,600 Citi employees would move to Axis. The deal follows a months-long auction process that included a rival bid from Kotak Mahindra Bank.
The acquisition will boost Axis Bank's retail market position and diversify its income profile, according to the rating agency, and is favourable for the bank's long-term profitability. Axis Bank's ability to retain acquired clients and successfully cross-sell its products and services to them will determine its earnings.