Citibank India’s Rs 12,325 Acquisition By Axis Bank Is Approved By Competition Commission Of India

The Competition Commission of India (CCI) has given its approval to Axis Bank’s acquisition of Citibank’s consumer businesses for Rs 12,325 crore.

What is being acquired

Citibank’s consumer businesses include covering loans, credit cards, wealth management, and retail banking operations in India.

The acquisition will give Axis Bank access to Citibank’s large and affluent customer franchise with a bouquet of fee-oriented and profitable segments.

These segments include quality credit card portfolio, affluent wealth management clientele, meaningful deposits along with a strong consumer lending portfolio.

How Axis Bank will benefit

It gets to acquire 3 million unique customers of Citibank India which will strengthen Axis Bank’s presence in the key identified growth segments.

Axis Bank’s Cards balance sheet will grow by 57% with an additional ~2.5 million Citibank cards, making it one of the top 3 Cards businesses in the country.

 Network expansion

Post acquisition, Axis Bank will have ~ 28.5 million Savings Accounts, 2.3 lakh+ Burgundy customers, and 10.6 million Cards.

It will also get access to 7 offices, 21 branches, and 499 ATMs across 18 cities.

The acquired portfolio would increase the Bank’s credit card customer base by ~31% with an additional 2.5 million cards.

On an overall basis, the proposed transaction will add ~7% to the Bank’s deposit base (with ~12% increase in CASA) and ~4% increase in advances.

Transition period

The transition will take 9-18 months with the flexibility of an additional six months.

This process will cost about Rs 1,500 crore; out of which Rs 1,100-1,200 crore will be paid by Axis Bank.

Citi customers will be shifted to the Axis Bank platform in a gradual manner.

Impact on customers

Post merger, current features and benefits of the credit cards and other services will remain the same for customers or they will be enhanced.

Customers will not see any change in the people they interact with in the bank, and customer experiences will remain the same or will be improved further.

KYC

Post merger KYC will take place again, which is the requirement of the regulator to take place periodically.

The banks will also need the consent of a particular kind in the transition processes before the date of closing.

Branches

There will be no change here and will remain the same as present. 

As most of Citi’s branches are at prime locations, Axis Bank has said that it would keep them to serve customers.