Axis Bank Acquires Citi Bank India’s Retail Banking For Rs 12,000 Crore: What Will Happen To Employees, Customers?
Citibank India’s consumer business will now be acquired by Axis Bank for $1.6 billion and this will be done in an all cash deal.
This deal does not include Citibank’s institutional client businesses in India.
Citibank Acquired By Axis For $1.6 Billion
The transaction between Citibank and Axis Bank includes the sale of the consumer banking businesses of Citibank India, which includes credit cards, retail banking, wealth management and consumer loans, as confirmed by Citibank.
The bank stated that the the transaction also includes the sale of the consumer business of Citi’s non-banking financial company, Citicorp Finance (India) Limited, comprising the asset-backed financing business, which includes commercial vehicle and construction equipment loans, and personal loans portfolio.
Earlier it was reported that Axis Bank was most likely to strike an all-cash deal for Citi’s India retail assets.
Citi India CEO Ashu Khullar said, “We continue to remain committed to contributing to India’s growth and development as we deepen our presence through our institutional businesses and our community initiatives. Citi will also continue to harness India’s rich talent pool in the areas of technology, operations, analytics, finance and allied functional areas through its network of Citi solution centers that are located in five cities in India and support our global businesses.”
All Employees To be Transferred To Axis After Completion Of Transaction
As we reported earlier, as a part of deal, which would be the size of something between $2 and $2.5 billion, Citibank will continue to service the customers during the integration period so that the transition is seamless and no one is inconvenienced.
After beating rivals like Kotak, another private lender which was reportedly “more aggressive” and had submitted a bid lower than that of Axis, Axis Bank emerged as the lead buyer. Before taking the final call, other factors like job security for current Citigroup employees, competition concerns, and more were also considered.
With 35 branches in India, the global bank has a customer base of 2.5 million account holders with 1.2 million loan accounts. All the 3600 employees that are a part of Citibank’s India consumer business will be transferred to Axis after the proposed transaction is completed.
For customers, Citi Bank has sent this message to all:
|Dear Valued Customer,
|Thank you for your continued trust in us.
|We had written to you last year, regarding Citi’s ongoing refresh of its global strategy, which resulted in the decision to exit from consumer businesses in 13 markets in Asia and EMEA, including India.
|Today, we write to update you that Citi has reached an agreement with Axis Bank for the sale of Citi’s consumer banking businesses in India.
|The transaction comprises the sale of the consumer banking businesses of Citibank India, which includes credit cards, retail banking, wealth management, and consumer loans, as well as the consumer business of Citi’s non-banking financial company, Citicorp Finance (India) Limited. It excludes Citi’s institutional client businesses in India; Citi remains committed and focused on serving institutional clients in India and globally.
|Let us reassure you, once again, that there will be no immediate change to any product you hold with us, be it credit cards, loans, deposits, investments, or any others. All our consumer banking operations including our call centers, ATMs, relationship teams, branches, Citibank online portal and the Citi mobile application, shall continue to operate as they do today.
|We are very pleased to enter into this transaction with Axis Bank – it is a leading private sector bank in the country, and operates a full suite of businesses, across all client segments. Axis Bank is committed to growing its business in India. We truly believe this will provide excellent opportunities for you, as valued customers.
|The transaction is expected to close in the first half of calendar year 2023 subject to requisite regulatory approvals. This announcement is only the start of a process, and while there will be a transition, we shall ensure that it is done in as seamless a manner as possible. We will ensure you are duly informed of all relevant changes to your services and products, with adequate advance notice.
|Thank you, once again, for the trust you have reposed in Citi, and we look forward to embarking on this new and exciting journey, with you.