Axis Bank said on Wednesday that it has completed its acquisition of Citibank's India consumer and non-banking finance businesses. The deal, announced in March 2022, has been closed for a cash consideration of $1.41 billion (Rs 11,630 crore) in one of the largest deals in the Indian financial services space. The acquisition will help Axis close the gap with larger peers like ICICI Bank and HDFC Bank.
From today (March 1), Citibank's home and personal loan, credit card and insurance businesses have now come under the control of Axis Bank.
The acquisition has taken almost a year, after being announced in March, 2022. Just days ago, Citibank took down its signboard from its landmark Kanak Building office on Kolkata's Chowringhee road - the place where the bank started its operations in India in 1902. In 2021, Citigroup announced its plans of exiting 13 international consumer banking markets, shifting its focus to wealth management and away from retail banking in places where it is small.
In a stock exchange filing last week, Axis Bank had informed that it had acquired the consent of Citibank's customers for taking over the business.
What the deal means for Axis Bank?
On its website, the bank had said last year that acquisition of three million unique customers of Citibank in India will enhance its presence in the key identified growth segments. The website also said that Axis Bank's cards balance sheet will grow by 57 per cent with addition of an additional 2.5 million Citibank cards, making it one of the top three cards businesses in the country.
Axis Bank's large loan book would be complemented by Citibank's affluent customer segment, creating product and branch footprint synergies, it added.
The acquisition will also transfer more than one million customers and an average salary of Rs 70,000 per month to Axis Bank, which will strengthen its salary business.
What will change for the customers?
Axis Bank said that Citibank's customers will be benefited from its augmented scale, larger geographical reach and width of products and offerings. Axis bank will gain access to seven offices, 21 branches and 499 ATMs across 18 cities in India.
When it comes to card transactions, Citibank is among the leading financial institutions in the country. According to an RBI report, transaction worth Rs 3,000 crore is carried out by the 2.5 million Citibank credit card users.
Though both the banks have said the customers will not face any issues, reports claims they will have to undergo a Know Your Customer (KYC) routine again. However, this process will be carried out in phases to minimise the inconvenience to customers.
Q3 result of Axis Bank
In the quarter ending December 2022, India's fifth largest lender by market value reported a net profit of Rs 5,853.1 crore, a jump of 61.9 per cent compared with the corresponding period a year ago.
The bank's net interest income (NII) - or the difference between interest earned and interest paid - increased 32.4 per cent on a year-on-year basis to Rs 11,459.3 crore, according to a regulatory filing.