Axis Bank Completes Acquisition of Citibank Companies: What It Means for Customers

Axis Bank said Wednesday it has completed the acquisition of Citibank’s Indian consumer and non-bank financing business in India. The deal, announced in March 2022, has closed for a cash consideration of $1.41 billion (Rs 11,630 crore) in one of the largest deals in Indian financial services. The acquisition will help Axis close the gap with larger industry peers such as ICICI Bank and HDFC Bank.

As of today (March 1), Citibank’s home and personal loan, credit card and insurance businesses have now come under the control of Axis Bank.

The acquisition has lasted almost a year, after it was announced in March 2022. Just days ago, Citibank took down the banner of the landmark Kanak Building office on Chowringhee Road in Kolkata – the place where the bank started operations in India in 1902. In 2021, Citigroup announced its plans to exit 13 international consumer banking markets and shift its focus to wealth management and away from retail banking in places where it is small.

Axis Bank had announced in a stock market filing last week that it had obtained approval from Citibank’s customers for the acquisition of the company.

What does the deal mean for Axis Bank?

On its website, the bank had said last year that the acquisition of three million unique customers of Citibank in India will strengthen its presence in key identified growth segments. The website also said Axis Bank’s card balance will grow by 57 percent with the addition of an additional 2.5 million Citibank cards, making it one of the top three card companies in the country.

Axis Bank’s large loan portfolio would be complemented by Citibank’s affluent customer segment, creating synergies between products and branches, it added.

The acquisition will also transfer more than one million customers and an average salary of Rs 70,000 per month to Axis Bank, strengthening its payroll business.

What changes for customers?

Axis Bank said Citibank’s customers will benefit from the greater scale, geographic reach and breadth of products and offerings. Axis Bank will have access to seven offices, 21 branches and 499 ATMs in 18 cities in India.

When it comes to card transactions, Citibank is one of the leading financial institutions in the country. According to an RBI report, a transaction worth Rs 3,000 crore is being carried out by the 2.5 million Citibank credit card users.

While both banks have said the customers will have no issues, reports claim they will have to undergo a Know Your Customer (KYC) routine again. However, this process will be carried out in phases to minimize disruption to customers.

Q3 result of Axis Bank

In the quarter ending December 2022, India’s fifth-largest lender by market value reported a net profit of Rs 5,853.1 crore, up 61.9 percent from the corresponding period a year ago.

The bank’s net interest income (NII) – or the difference between interest earned and interest paid – rose 32.4 percent year-on-year to Rs 11,459.3 crore, according to a filing.