Axis Bank may soon become the third largest credit card player after HDFC Bank and SBI post the Citibank deal
- Axis Bank is all set to acquire US-based Citibank's consumer business in India for ₹12,325 crore.
- Axis Bank would benefit from Citibank’s mostly ultra high net worth customers in the credit card space, which would eventually make it the third largest player after HDFC Bank and SBI.
- Analysts say the deal would add 31% to its credit card customer base i.e., 2.5 million.
The private sector bank is all set to acquire US-based Citibank's consumer business in India for ₹12,325 crore.
Analysts believe that the lender will boost its credit card and retail business post the acquisition.
There will be a 31% increase to Axis Bank’s credit card base and significant increase to customer spends, says a report by ICICI Securities. It says Axis Bank will become close to becoming the third player in terms of the credit card number outstanding post the deal.
“It (the deal) will consolidate Axis Bank’s position in the credit card market – taking its market share up by close to 400-500 basis points by number of cards and spends. It will elevate Axis Bank to the #3 position by credit card receivables,” said Kotak Institutional Equities.
|Change post deal (Pro forma)
|Credit card market share
“Further, the bank has indicated that the overlap on the cards book is not significant given that Citi’s strength is in the top-8 markets (primarily affluent and super affluent customers), while Axis’ strength is in deeper geographies (primarily mass and mass affluent customers, with affluent customers at 11%). Hence, the bank is confident of large customer additions,” said a report by Kotak Institutional Equities.
Morgan Stanley reportedly said that the deal would strengthen the bank's franchise and reduce gap versus peers while maintaining an ‘overweight’ rating.
|Kotak Institutional Equities
$AXISBANK.NSESetup - Larger degree wave 2 seems over✅ Looking for wave 1 of (3) should unfold✅ Price action seems sorted✅ Breakout soon candidateKeep on radar!Potential upside candidate!— (@chartmojo) March 31, 2022
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