The private bank will pay a consideration upto Rs 12,325 crore to Citibank for acquiring its consumer businesses in India.
The transaction comprises the sale of the consumer businesses of Citibank India, which includes credit cards, retail banking, wealth management and consumer loans. The deal also includes the sale of the consumer business of Citi's non-banking financial company, Citicorp Finance (India), comprising the asset-backed financing business, which includes commercial vehicle and construction equipment loans, as well as the personal loans portfolio.The deal offers strategic advantages to Axis Bank, such as premiumization of its overall customer portfolio, increased opportunities to cross-sell its products and accelerated digital transformation. Post the acquisition, Axis Bank will have about 28.5 million savings accounts, 2.3 lakh+ Burgundy customers and 10.6 million Cards.
The acquired portfolio will increase Axis Bank's credit card customer base by about 31% with an additional 2.5 million cards, which will in turn bolster the Cards balance sheet position to be amongst the top 3 players in the Indian market. Moreover, the wealth and private banking portfolio will add great value to the Axis Burgundy business, further accelerating its growth ambitions in that segment. On an overall basis, the proposed transaction will add about 7% to the Axis Bank's deposit base (with around 12% increase in CASA) and about 4% increase in advances.
Axis Bank will gain access to 7 offices, 21 branches and 499 ATMs across 18 cities. Approximately 3600 in-scope consumer employees of Citibank will be absorbed in Axis Bank.
The deal is expected to close in Q4FY23, subject to regulatory and/or other customary conditions.
Axis Bank is the third largest private sector bank in India. With its 4,700 domestic branches (including extension counters) and 11,060 ATMs across the country as on 31st December 2021, the network of Axis Bank spreads across 2,665 centers.
The private sector bank's net profit increased by 224% to Rs 3,614 crore on 9.48% increase in total income to Rs 21,101.48 crore in Q3 December 2021 over Q3 December 2020.
Shares of Axis Bank were up 1.32% at Rs 760.10 on the BSE.
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(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)
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