Axis Bank’s proposed acquisition of Citibank’s consumer businesses in India strongly positions it for accelerated premium market share growth

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On Wednesday, Axis Bank and Citibank announced that their respective Boards of Directors had authorized Axis Bank’s acquisition of Citibank’s consumer businesses in India. The deal is subject to usual closing conditions, which include regulatory approvals.

Citibank India’s consumer businesses, including credit cards, retail banking, wealth management, and consumer loans, are being sold in this transaction. The transaction also comprises the sale of Citicorp Finance (India) Limited’s consumer business, which includes the asset-backed financing business, which includes commercial vehicle and construction equipment loans, as well as the personal loans portfolio.

This transaction is viewed by Axis Bank as a good strategic match. It will get access to Citibank’s substantial and affluent customer franchise, which includes a strong credit card portfolio, affluent wealth management clients, meaningful deposits (with 81 percent being CASA), and a robust consumer loan portfolio. Axis Bank will have 28.5 million savings accounts, 2.3 lakh Burgundy customers, and 10.6 million cards after the merger.

Over the last few years, the Bank has made significant investments in people, processes, and technology. It expects value-adding integration across all important criteria, including personnel, customers, product offers, and technology, now that all needed capabilities are in place. Furthermore, the purchase provides the Bank with strategic benefits such as premiumization of its whole client portfolio, increased chances to cross-sell its products, and faster digital transformation.

With an extra 2.5 million credit cards, the purchased portfolio will boost Axis Bank’s credit card user base by 31%, boosting the Cards balance sheet position to be among the top three competitors in the Indian industry. Furthermore, the wealth and private banking portfolio will provide significant value to Axis Burgundy’s business, advancing the company’s expansion plans in that sector. Overall, the proposed transaction will expand the Bank’s deposit base by 7% (with a 12% rise in CASA) and advances by 4%.

Axis Bank and Citibank will work together to guarantee that excellent customer service levels are maintained across all client channels, even after the transaction has closed. Customers of Citibank will continue to receive all of the awards, privileges, and incentives that they were previously eligible for. Customers of Citibank will also benefit from Axis Bank’s broader global reach and comprehensive service offerings, as well as One Axis capabilities that span all of the company’s subsidiaries. Customers will benefit from digital banking and the highly-rated Axis Mobile app, which offers 250+ services, by having rapid access to monitor and transact across product categories such as deposits, investments, payments, and protection solutions. Furthermore, both Citibank and Axis Bank customers will benefit from the world-class Citi Phone Banking.

“We are delighted with the addition of an enviable retail franchise and a high-quality talent pool as we continue our journey towards becoming a premier financial services brand, in line with our GPS strategy framework. This is a significant milestone in Axis’ journey of growth and leadership and will bring great value to 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, as they join Axis’ 86,000+ strong, dedicated workforce. Axis Bank already has a rich network of Citi alumni across the hierarchy, which reflects cultural alignment between the two organizations. Given the expertise that Citi employees bring to the table, we view them as a significant addition to our existing team that will help drive synergy realization and our GPS objectives. We welcome all employees to the Axis Family and together we will serve our customers ‘Dil Se’,”

Speaking on the occasion, Amitabh Chaudhry, MD&CEO, Axis Bank 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 an excellent environment to build their careers and shall meet all the financial needs of our consumer clients. We continue to remain committed to contributing to India’s growth and development as we deepen our presence through our institutional businesses and our community initiatives. Citi will also continue to harness India’s rich talent pool in the areas of Technology, Operations, Analytics, Finance, and allied functional areas through its network of Citi Solution Centers that are located in five cities in India and support our global businesses.,”

Citi India CEO, Ashu Khullar said. 

In partnership with Citibank, a well-defined Integration Plan and a focused senior execution team will enable a smooth transition and flawless integration on all fronts. Customer Service, Personnel, Systems & Technology, and other synergies will be the focus of the team, which includes experts with experience in operationalizing large-scale integration efforts.

Axis Bank’s financial advisors were Axis Capital and Credit Suisse, and the transaction’s legal advisor was Khaitan & Co. PricewaterhouseCoopers and Boston Consulting Group also contributed to the Bank’s success.

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