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Mumbai: Citi on Wednesday said it has reached an agreement with Axis Bank Ltd to sell its consumer businesses in India for $1.6 billion in cash.
Axis Bank was selected by Citi following an extensive and competitive auction process, it said.
The transaction will include approximately 3,600 Citi employees supporting the consumer businesses in India, who will transfer to Axis upon completion of the proposed transaction.
As on 31 March 2021, Citi had loans of ₹68,747 crore in India and deposits of ₹1.66 trillion. Its total number of credit cards stood at 2.55 million in February 2022, data from the Reserve Bank of India (RBI) showed.
In April last year, Citigroup had said it will exit consumer businesses in 13 countries including India as it focuses on four wealth centres in Singapore, Hong Kong, the UAE and London.
The transaction, Citi said on Wednesday, comprises the sale of the consumer banking businesses of Citibank India, which includes credit cards, retail banking, wealth management and consumer loans. It also includes the sale of the consumer business of Citi’s non-banking financial company, Citicorp Finance (India) Ltd, comprising the asset-backed financing business, which includes commercial vehicle and construction equipment loans, as well as the personal loans portfolio.
"It excludes Citi’s institutional client businesses in India; Citi remains committed and focused on serving institutional clients in India and globally," the bank said.
The transaction is expected to close in the first half of calendar year 2023 subject to requisite regulatory approvals.
"This announcement is only the start of a process, and while there will be a transition, Citi will ensure that it is done in as seamless a manner as possible, with due notice. There will be no immediate impact on the services to the customers of Citi’s consumer businesses in India," the statement said.
Upon closing, Citi said it expects the transaction to result in the release of approximately $800 million of allocated tangible common equity. Citi’s global exit from its consumer banking franchises in 13 markets across Asia and EMEA is expected to release approximately US$7 billion of allocated tangible common equity over time, it said.
Peter Babej, chief executive of Citi Asia Pacific said, “Our announced transaction with Axis, a leader in Indian financial services, represents an important milestone for our franchise and offers an excellent opportunity to our consumer banking colleagues in India."
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