Axis Bank All Set To Acquire Citigroup's Retail Business In India For $2.5 Billion, Says Report

Citigroup, American banking major, in April 2021 announced its plan to exit from the retail banking business in India as part of its global strategy

New Delhi: Axis Bank, India’s third-largest private sector bank, is all set for a deal to buy Citigroup’s India retail banking business, people familiar with the matter told the PTI. The private sector lender is on the verge of closing the deal.

Quoting the sources, the PTI reported the transaction, to be valued at $2.5 billion (about Rs 18,000 crore), will be subject to regulatory approvals.

According to reports, the deal would include a cash component of less than $2 billion, accounting for the consumer business’s liabilities.

Citigroup, American banking major, in April 2021 announced its plan to exit from the retail banking business in India as part of its global strategy.

The business comprises credit cards, retail banking, home loans, and wealth management. Citigroup has 35 branches in the country and employs about 4,000 people in the consumer banking business.

Axis Bank emerged as the buyer after beating out rivals, with factors such as job security for current Citigroup employees and competition concerns being taken into account, one of the people said.

Once the deal gets the necessary approvals, the sources said the balance sheet size of Axis Bank will expand and the retail segment will witness a significant jump.

An e-mail sent to Axis Bank seeking comments on the proposed deal did not elicit any response immediately.

However, Citigroup Chief Executive Officer Jane Fraser in February said the planned India retail sale is part of a restructuring to simplify the US lender, do away with its retail banking operations in 13 countries across Asia and Europe, and focus on high-growth businesses such as wealth management.

Axis Bank, earlier this month, said it was yet to take a decision on the purchase of Citigroup's India retail business.

Citigroup had entered India in 1902 and started the consumer banking business in 1985.

Apart from the institutional banking business, Citigroup in India will continue to focus on offshoring or global business support rendered from centres in Mumbai, Pune, Bengaluru, Chennai, and Gurugram.