Customers of Citi India can continue to enjoy all of the benefits and offerings but are required to give consent to become Axis Bank's customers
Axis Bank, India's third-largest private sector bank, has acquired the retail assets of Citi India for a whopping $1.6 billion or Rs 12,325 crore. Axis Bank will take over retail banking, loans, credit cards, loans, and wealth management operations. This is the largest deal in the banking space since Kotak Mahindra Bank acquired ING Vysya Bank for Rs 15,000 crore.
Axis Bank's Managing Director, Amitabh Chaudhry stated that Citi India's customers can continue to avail all the privileges and offers that they had prior to the acquisition. If their customers are satisfied with Axis Bank taking over the operations, their accounts and credit cards can change, else they can terminate their relationship with the bank and exit with their deposits. All the Citibank customers will have to give consent to become customers of Axis Bank.
Here are some key points that you may want to know:
Why is CitiBank leaving India?
In April 2021, the US banking major CitiBank announced that it is exiting retail operations in India. This was part of their decision to exit from 13 countries across Asia and Europe. The other markets from which the bank is exiting are Australia, China, Russia, Indonesia, Korea, Bahrain, Malaysia, Philippines, Poland, Taiwan, Thailand, and Vietnam. The reason is due to intense competition from local banks and declining share in the retail base. While the local rivals were growing their retail business, CitiBank found it extremely difficult to hold on with decreasing interest income.
Citi India's CEO, Ashu Kullar stated that the institutional business where the bank provides services to corporates would continue as it does not require a wider presence, higher number of employees, and is a relatively safer space compared to retail banking.
Axis Bank closed at a price to earnings of 18.2 times and price to book value of 2.0 times with a total market capitalisation of Rs 2,30,292.5 crore on March 30, 2022.