On Wednesday, Axis Bank announced the completion of its acquisition of Citibank's India consumer and non-banking lending businesses.
The transaction, announced in March 2022, was completed for a cash consideration of $1.41 billion (Rs 11,630 crore), making it one of the largest in the Indian financial services sector.
The acquisition will assist Axis in closing the gap with larger competitors such as ICICI Bank and HDFC Bank.
Citibank's home and personal loan, credit card, and insurance divisions have now been taken over by Axis Bank as of today (March 1).
After being announced in March 2022, the deal took nearly a year to complete. Citibank has removed its signboard from its famous Kanak Building office on Kolkata's Chowringhee Boulevard, where the bank began operations in India in 1902.
Citigroup revealed intentions to quit 13 international consumer banking markets by 2021, moving its focus to wealth management and away from retail banking in minor economies.
Axis Bank announced last week in a stock exchange filing that it had obtained the agreement of Citibank's clients to take over the firm.
What does the transaction signify for Axis Bank?
Last year, the bank stated on its website that the acquisition of three million unique Citibank customers in India will strengthen its footprint in the key recognized growth categories. According to the website, Axis Bank's cards balance sheet would rise by 57% with the acquisition of 2.5 million Citibank cards, making it one of the top three card businesses in the country.
It said that Axis Bank's vast loan book would be supplemented by Citibank's wealthy customer sector, resulting in product and branch footprint synergies.
Axis Bank will gain over one million customers and an average monthly income of 70,000 as a result of the transaction, which will improve its wage business.
What will change for the customers?
According to Axis Bank, Citibank's customers will benefit from its increased scale, geographic reach, and breadth of products and offerings. Axis Bank will have access to seven offices, 21 branches, and 499 ATMs in 18 Indian cities.
Citibank is one of the country's biggest financial companies when it comes to card transactions. According to an RBI report, the 2.5 million Citibank credit card customers do transactions worth 3,000 crore.
Despite both banks' assurances that customers will have no problems, sources indicate they will have to go through the Know Your Customer (KYC) process again. This approach, however, will be carried out in stages to minimise consumer disturbance.
Axis Bank's Q3 Result
In the quarter ended December 2022, India's fifth largest lender by market capitalization reported a net profit of 5,853.1 crore, up 61.9 percent from the same period last year.
According to a regulatory filing, the bank's net interest income (NII) - or the difference between interest collected and interest paid - grew 32.4 percent year on year to 11,459.3 crore.
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