US bank Citigroup on Wednesday announced sale of its Indian consumer banking businesses, including credit cards, retail banking, wealth management and consumer loans, to private lender Axis Bank for Rs 12,325 crore, as part of its plans to exit retail operations in 13 markets.
The deal, which is expected to close in the first half of the 2023 calendar year, will include the transfer of about 3,600 Citi employees to Axis.
The sale excludes Citi’s institutional client businesses in India, it said.
Axis Bank is the fourth-largest issuer of credit cards with a total base of 86 lakh cards and the deal will add about 25 lakh credit cardholders, making it one of the top three cards businesses in the country, the private lender said in a separate statement.
Axis, which has a retail book of nearly Rs 4 lakh crore, will acquire about 30 lakh unique customers of Citibank India, seven offices, 21 branches and 499 ATMs across 18 cities.
Citi’s retail book is nearly Rs 68,000 crore, of which retail loans account for Rs 28,000 crore. With 12 lakh bank accounts, the total India business contributes 1.5 per cent in profit to the lender’s global book.
“Axis Bank’s large loan book would be complemented by Citibank’s affluent customer segment, creating product and branch footprint synergies,” the private lender said. “Post the acquisition, Axis Bank will have 2.85 crore savings accounts, 2.3 lakh+ Burgundy customers and 1.06 crore cards.”
Citibank’s customers, it said, will continue to avail all the rewards, privileges, and offers to which they were previously entitled.
Citibank, under its first woman CEO Jane Fraser, decided to exit retail businesses in 13 markets to conserve capital and focus on higher-yielding revenue streams.
Citi entered India in 1902 and started the consumer banking business in 1985.
Apart from the institutional banking business, it will continue to focus on offshoring or global business support rendered from centres in Mumbai, Pune, Bengaluru, Chennai and Gurugram.
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For the fiscal year ended March 31, 2021, Citibank India reported a net profit of Rs 4,093 crore, down from Rs 4,918 crore in the preceding fiscal year. It has 35 branches across the country.
As of March 31, 2021, the bank’s concentration of non-performing assets (NPAs) stood at Rs 143.34 crore, involving exposure to top-four NPA (non-performing asset) accounts. While the gross NPAs stood at Rs 990.94 crore.
Its retail bank serves people across the spectrum, including the salaried and the high networth individuals, through dedicated offerings.
