MUMBAI: Axis Bank, the third-largest private sector bank in the country, on Wednesday, said it has completed acquisition of Citibank’s consumer business in India for a cash consideration of Rs 11,603 crore. With this acquisition, Axis Bank has added 18 lakh credit customers, deposits worth about Rs 40,000 crore, wealth management business worth Rs 94,700 crore and 1,600 Suvidha corporate salary accounts.
The transaction comprises sale of the consumer businesses of Citibank India, which includes loans, credit cards, wealth management and retail banking operations. The deal includes the sale of the consumer business of Citi’s non-banking financial company, Citicorp Finance (India), comprising asset-backed financing business, which includes 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 has gained access to the large, affluent and profitable customer franchise of Citibank, which aligns well with its Premiumization strategy,” said Amitabh Chaudhry, MD and CEO of Axis Bank, addressing a press conference on Wednesday.
The entire integration will happen over next 18 months, Chaudhry said, adding that there will be a hit of Rs 1,500 crore to be taken as implementation costs, which will be amortised as the costs are incurred.
With the acquisition, Axis Bank gets a quality credit card franchise with one of the highest wallet shares in premium cards, that is complementary and consolidates its position in cards business, market share improving from 11.4% to 16.2%.
The acquired portfolio will raise the bank’s credit card customer base by 19%. It has now aggregate deposits of Rs 8.9 lakh crore, with share of CASA deposits rising by 150 bps to 46% of total deposits. 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.