Axis Bank Ltd is all set to buy retail banking business of Citigroup Inc. which is valued at $2.5 billion.
Deal to Include Cash Component of Less Than $2 billion
Upon the approval from the RBI (Reserve Bank of India), which can be done in next few weeks, an agreement for the consumer unit may be announced, said people on the condition of anonymity. People said, accounting for the consumer business’s liabilities, that the deal would include a cash component of less than $2 billion.
One of the source said that with the factors such as job security for current Citigroup employees and competition concerns being taken into account, lender emerged as the buyer after beating out rivals. A different source stated that it would take a period of around six months for Axis Bank to merge its consumer business with that of Citigroup.
While talks are in the later stages, there have been instances of agreements being delayed or fallen apart. Representatives for Axis Bank and Citigroup declined to comment.
Axis Bank Trying To Boost Retail Sales
Jane Fraser, CEO – Citigroup said that the retail sale is part of a restructuring to simplify the U.S. lender, do away with its retail banking operations in 13 countries across Asia and Europe, and focus on high-growth businesses such as wealth management. In order to tap the pent-up demand after the first two waves of Covid-19, country’s third largest private sector lender has been trying to boost retail loans.
As the ease of the coronavirus pandemic helped a revival in consumer demand, Axis Bank said that the quarterly profit more than tripled on robust earnings from lending and its non-core business including fees and trading.
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