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 for $2.5 billion, people familiar with the matter told Bloomberg.
According to sources, an agreement for the consumer unit may be announced in the coming few weeks. The matter is contingent on approval from the Reserve Bank of India (RBI). The deal would include a cash component of less than $2 billion, accounting for the consumer business’s liabilities.
The private lender 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. Axis Bank will need around six months to merge its consumer business in the country with Citigroup’s, Bloomberg reported.
While talks are advanced, as with all deals, an agreement could be delayed or fall apart.
However, representatives for Axis Bank and Citigroup declined to comment.
Citigroup Chief Executive Officer Jane Fraser 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 has been trying to boost retail loans to tap pent-up demand after the first two waves of Covid-19.
Axis Bank in January had said that quarterly profit more than tripled on robust earnings from lending and its non-core business, including fees and trading, as the easing of the pandemic helped a revival in consumer demand.