Axis Bank completes Citibank India's consumer business buyout for Rs 11,600 cr

The deal was closed within seven months of receiving approval from the Competition Commission of India (CCI), the bank said in a statement on Wednesday.

The transaction involves the consumer businesses of Citibank India, including loans, credit cards, wealth management, and retail banking operations.

It also includes the consumer business of Citicorp Finance (India) Limited, which consists of the asset-backed financing business, commercial vehicle and construction equipment loans, as well as the personal loans portfolio.

The acquisition is a healthy strategic fit in line with Axis Bank’s GPS (Growth, Profitability & Sustainability) strategy and its focus on premium segment growth, the bank said in a statement.

The bank has gained access to the large, affluent, and profitable customer franchise of Citibank, which aligns well with its Premiumization strategy.

With the acquisition, comes a quality credit card franchise with one of the highest wallet shares in premium cards, which is Complementary and consolidates Axis’ position in the cards business, with market share improving from 11.4% to 16.2%, the statement said.

The acquired portfolio would increase Axis Bank’s credit card customer base by about 19%, with an addition of 1.8 million cards.

With the highest number of transactions per card across the industry and digitally engaged customers, the deal would strengthen Axis Bank’s position in the top 8 metros, while also providing the opportunity to adopt global best practices in client servicing and operations through Citi Phone banking, according to Axis Bank.

Additionally, the acquisition of 2.4 million customers of Citibank India enhances Axis Bank’s presence in the key growth segments, complementing the existing Axis franchise, it said.

The bank now has aggregate deposits of Rs 8,881 Bn of which a high proportion of CASA is at 77%, with SA constituting 71%. Access to a premium deposit base with deep corporate salary relationships has improved the combined CASA ratio on the proforma basis by around 150 bps to 46%.

Affluent and digitally engaged SA customer base with access to approx. 1600 Suvidha corporate relationships that significantly strengthen Axis Bank’s Salary Business.

Post-acquisition, Axis Bank gains ready access to highly affluent wealth customers resulting in a 33% addition to the overall AUM of Burgundy  Private Banking portfolio, further strengthening the existing franchise, Axis Bank said.

With an added AUM of Rs 947 bn across Citi products in Wealth Management and Private Banking, the current AUM of the Bank’s wealth management portfolio stands at Rs 3785 bn, making it the 3rd largest in the industry.

The diverse talent pool of nearly 3200 employees trained in global best practices, and experienced leadership with deep domain expertise, will be retained.