Private lender Axis Bank will take over the retail banking operations of Citibank in India. The Rs 12,325-crore deal to acquire Citigroup’s India consumer banking business will help Axis Bank close the gap with larger peers like ICICI Bank and HDFC Bank. Announcing the Axis-Citi deal, Axis Bank managing director Amitabh Chaudhry said, “ This is a significant milestone in Axis’ journey of growth and leadership and will bring in great value for all stakeholders. The amplified scale and width of offerings, the diversified portfolio of products and global best practices will enhance customer experience, while greater synergies both on the revenue and cost side will augment value for the new franchise. We look forward to collaborating with Citi’s experienced senior leadership team and diverse talent pool, We welcome all employees to the Axis Family and together we will serve our customers ‘Dil Se’.”
Citi India CEO, Ashu Khullar said, “We are extremely pleased with this outcome for our consumer colleagues and clients. Axis Bank is committed to building its consumer banking business in India and is backed by a strong market presence. We believe Axis Bank will provide our employees with an excellent environment to build their careers and shall meet all the financial needs of our consumer clients.”
Axis-Citi deal: Transition period
Regulatory approvals are expected in nine months, after which the payment will be made and a complex integration process will begin. Post the acquisition, Axis Bank will have 28.5 million Savings Accounts, 2.3 lakh+ Burgundy customers and 10.6 million cards.
Here’s what Citi Bank India debit and credit card customers need to know about the deal and its impact:
1) Citibank’s customers will continue to avail all the rewards, privileges, and offers to which they were previously entitled.
2) If the customers agree to Axis managing their business, their accounts, credit cards and other business will change over, else the relationship will terminate and they can exit with their deposits.
3) All Citibank customers will have to give consent to become Axis Bank customers after the deal gets regulatory approval.
4) According to the RBI data, the total number of Citi credit cards in India stood at 2.55 million. The total number of its debit cards stood at 1.44 million.
5) Citibank’s customers will specifically benefit from Axis Bank’s wider geographical reach.
6) Digital Banking and the highly-rated Axis Mobile app offering 250+ services will be an added advantage for customers, having immediate access to view and transact across product categories such as deposits, investments, payments and protection solutions.
The acquired portfolio would increase Axis Bank’s credit card customer base by 31% with an additional 2.5 million cards, which will in turn bolster the card’s balance sheet position to be amongst the top 3 players in the Indian market.
The last deal of this size was the Rs 12,500-crore merger between Kotak Mahindra Bank and ING Vysya Bank or the RBI-backed merger between DBS Bank India and Lakshmi Vilas Bank.
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