Axis Bank is set to announce its acquisition of Citi’s retail banking business in India today, which will include credit cards, wealth management and retail customer accounts. The deal was previously understood to be worth around $ 2 billion, but the final value could be lower, sources close to the development told FE.
Peter Babej, chief executive officer, Citi Asia Pacific, is known to have landed in Mumbai last evening, and will be present for the announcement. The deal will become effective six months from the date of the announcement and the payment will be on the basis of the metrics of the business at present. The second part of the deal will include a service agreement, which will form a larger part of the transaction, under which Citibank will continue to service the customers for a period of 12 to18 months.
Citi has been consistently losing credit card customers since the global bank expressed its intention to exit the retail business in April 2021. The bank’s credit cards outstanding in India in February 2022 stood at 2.55 million, down from 2.61 million in May 2021. Axis Bank had an outstanding credit card base of 8.6 million in February, as per data released by the Reserve Bank of India (RBI).
Typically, deal integration of this scale takes anywhere between 12 and 18 months and, during this period, Citibank will continue to service the credit card customers so that the transfer is seamless without causing any disruption to them.
Citibank announced the sale of its retail businesses across geographies after its new global CEO Jane Fraser indicated that the bank would exit some consumer businesses. Under this global restructuring, India’s credit card business was axed. Other markets where it plans to exit the retail business include countries like Australia, Malaysia, Thailand, Vietnam, Poland and Philippines.