Axis Bank Will Acquire Citi Bank India For Rs 11,000 Crore? Here’s The Reason Why

Axis Bank Will Acquire Citi Bank India For Rs 11,000 Crore? Here's The Reason Why
Axis Bank Will Acquire Citi Bank India For Rs 11,000 Crore? Here’s The Reason Why

Reportedly, the country’s private lender, Axis Bank may have emerged as the highest bidder for the retail business of Citibank India, on December 20.

Axis Bank Emerged As Front Bidder

It looks like Axis is about to strike an all-cash deal for Citi’s India retail assets.

The deal could be worth $1.5 billion with up to $300-400 million milestone payments depending on the performance in the future, according to the sources.

In reaction to this news, Citi bank, suggesting that Axis may be leading the acquisition race. 

Further adding, “We continue to move forward with our process with respect to our India consumer business in accordance with our broader strategic refresh.”

So far, Axis did not issue a statement in this regard.

What Is At Stake? 

Apart from Axis, Kotak Mahindra Bank and Indusland Bank were in the race to acquire Citi’s India retail business. 

And why not as this business involves over 2.5 million customers and more than 1.2 million bank accounts.

An earlier report mentioned that Kotak was more “aggressive” between the two bidders.

It is most likely to be an all cash deal of less than $2 billion, sources said.

It is noteworthy here that Citibank runs a profitable franchise in India.

It had a loan book of Rs 68,800 crores as on March, 2021, of which Rs 28,000 crore was retail loans. 

Basically, this includes cards, mortgages and personal mortgages, as per a report released by investment group CLSA on September 8.

Notebly, Citibank is the sixth largest card issuer with market share of 4.2 per cent in cards issued.

So, Citibank expected to have a credit card book of approximately Rs 9,000 crore, As per CLSA’s estimates. 

Why Would This Happen? 

Prior to this, Citi said it will exit consumer/retail operations in 13 countries across Asia and Europe On 16 April. 

 These 13 nations list includes the countries like Australia, Bahrain, China, India, Indonesia, Korea, Malaysia, the Philippines, Poland, Russia, Taiwan, Thailand and Vietnam.

Considering India, Citi’s consumer business here comprises credit cards, retail banking, home loans and wealth management. 

Presently, Citibank has 35 branches in India employing 4,000 people in the consumer banking business. 

As of October 2021, it had a 0.6 percent market share in advances and 1.1 percent in deposits, along with 2.58 million credit cards outstanding.

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