Axis Bank completes acquisition of Citibank’s consumer business for ₹11,603 crore – here’s everything to know
Business Insider India
Axis Banksaid the acquisition will add 1.8 million credit card holders to its customer base, increasing its market share from 11.4% to 16.2%.
- In terms of wealth management services, the acquisition will add ₹94,700 crore worth assets under management (AUM) to Axis Bank’s portfolio.
Citibankcustomers can now access Axis Bank’s ATMs but certain services like Citigold global banking privileges will cease after the transfer.
- The banks had announced the ₹11,603 crore deal in March 2022.
AdvertisementIndia’s third-largest private lender Axis Bank on Wednesday said it has completed the acquisition of Citibank’s consumer business. Valued at ₹11,603 crore, the deal includes Citibank’s lucrative credit card customer base, retail banking, loans, and wealth management services.
Announced in March 2022, the transaction is now complete, three months ahead of Citibank’s expectations. As part of the deal, approximately 3,200 Citibank employees will also be absorbed by Axis Bank.
“The bank has gained access to the large, affluent and profitable customer franchise of Citibank, which aligns well with its premiumisation strategy,” Axis Bank said in an exchange filing.
Axis Bank also noted that this acquisition will add 1.8 million credit card holders to its customer base, increasing its market share from 11.4% to 16.2%. In terms of wealth management services, the lender said the acquisition will add ₹94,700 crore worth assets under management (AUM) to its portfolio, giving its Burgundy private banking franchise a 33% boost.
“Finding the familiar in the new, is a wonderful thing. Welcome to a dil se (from the heart) open world that feels less new, more you,” Axis Bank said in a tweet on Wednesday, marking the takeover.
Cititbank’s credit card customers are more valuable
Although Citibank has nearly one-fourth of the credit card customers that Axis Bank has, they are more valuable than the latter’s – the per-card value for Citibank works out to ₹16,869 compared with ₹12,272 for Axis Bank.
At the end of January, Citibank had 2.5 million active credit cards with a cumulative transaction value of ₹4,180 crore across 11.7 million transactions.
During the same period, Axis Bank had 9.6 million active credit cards with a cumulative transaction value of ₹11,763 crore across 32.5 million transactions.
Axis Bank will manage Citibank’s retail customers going forward
Axis Bank will now manage all the loans, credit cards, wealth management and retail banking services of Citibank.
Overall, Citibank has over 3 million customers in India – over 80% of these are credit card customers, with the remaining spread across the lender’s other services.
Axis Bank has set March 1, 2023 as the transfer date for existing Citibank customers – which means that they will now be able to access Axis Bank’s ATMs just like they did Citibank’s.
However, certain services like Citigold global banking privileges will cease after the transfer. Citibank customers who have made investments in mutual funds or used Citibank’s portfolio management services will have them transferred to Axis Bank.
Citibank credit card users will also continue to enjoy earning rewards and redeem them as usual, and there won’t be any changes in fees, interest charges, billing cycles and standing instructions in place.
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