July 17, 2024
Business Featured Latest News

Citi’s India consumer business will be acquired by Axis Bank for $1.6 billion

Citi announced in a press release that Axis Bank will acquire Citi’s consumer businesses in India for a cash consideration of approximately $1.6 billion.

According to the statement, the transaction involves the sale of Citibank India’s consumer banking businesses, which include credit cards, retail banking, wealth management, and consumer loans. Citi chose Axis after a lengthy and competitive auction process, according to the global banking behemoth.

The sale of Citi’s non-banking financial company (NBFC) Citicorp Finance (India) Limited’s consumer business, which includes the asset-backed financing business, which includes commercial vehicle and construction equipment loans, as well as the personal loans portfolio, is also part of the deal.

However, Citi’s institutional client businesses in India are not included. According to the statement, “Citi remains committed and focused on serving institutional clients in India and around the world.” Approximately 3,600 Citi employees in India who work in consumer banking will transfer to Axis Bank after the transaction is completed. The transaction is expected to close in the first half of calendar year 2023, subject to regulatory approvals, according to Citigroup.

“While there will be a transition, Citi will ensure that it is done as seamlessly as possible, with due notice,” the statement said, adding that there will be no immediate impact on Citi’s consumer business customers’ services. Citi expects the transaction to release around $800 million in allocated tangible common equity when it closes. Citi’s global exit from its consumer banking franchises in 13 markets across Asia and EMEA, as previously announced, is expected to release $7 billion in allocated tangible common equity over time. Citi’s Banking, Capital Markets, and Advisory Group is serving as the transaction’s exclusive financial advisor.

Citi, as the country’s leading investment bank, has assisted in the raising of over $29 billion in capital across over 40 equity and debt transactions in 2021 alone, as well as providing strategic M&A advisory on seven announced transactions totaling over $5 billion. It also manages 8% of India’s trade and 5% of the country’s electronic payments. Citi helps foreign portfolio investors gain access to Indian markets by serving as a custodian for about a third of their activities in the country.

Picture Courtesy: Google/Images are subject to copyright


Related Posts

Leave a Reply

Your email address will not be published. Required fields are marked *