Lately, in a big merger, Private banking sector giant Axis Bank has acquired Citigroup’s consumer banking business in India, including credit cards, retail banking, consumer loans, and asset management, for INR 12,325 crores. With this acquisition, about 30 lakh customers of Citibank will become customers of Axis Bank. At the same time, the portfolio of credit cards will increase by 31 percent.
Merger widens Axis Bank’s business base:
Axis Bank said in a statement that the deal would give it seven offices, 21 branches, and 499 ATMs across 18 cities. About 3,600 employees associated with the consumer business of Citibank will be taken to Axis Bank. US-based bank Citigroup announced its exit from the customer banking business in India in April 2021 as part of a global strategy. The business of the bank includes credit cards, retail banking, housing loans, and asset management. Axis Bank’s top management also assured the employees of Citigroup that 3600 employees will be retained in Axis Bank and there will be no salary cut. The Citibank goodwill amount will be written off after the deal.
Citigroup Consumer banking position:
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A Reserve Bank report states that Citibank has about 2.5 million credit cards in India, with transactions worth Rs 3,555 crore in a month. This also includes an ATM transaction of Rs 6.7 crore. There are 14 lakh debit cards and loan accounts around 12 lakh. Once the Axis-City deal is completed, the customers of Citibank will become Axis. Citi customers will start taking advantage of Axis Bank’s services and offers. After the deal, Axis Bank will have a business of more than 28 million savings accounts, over 23 lakh Burgundy customers (salary accounts), and more than 10 million cards.
What about Citibank customers?
It may take 9-18 months for Citibank customers to get transferred to Axis Bank. Axis Bank has engaged a team to shift customers. 1500 crores will be spent on shifting of customers, of which 1200 crores is being paid by Axis Bank. Notably, the customers of Citibank will have to get KYC done again in Axis Bank. This will be done gradually and in turn. However, there will be no change in the branch of Citibank as all its branches are at prime locations. In these branches, customers will get the same facilities that were available at the time of Citibank.