Lending major Axis Bank will acquire the Citibank's consumer businesses in India, and it is subject to regulatory approvals.
The boards of Axis Bank and Citibank have approved the deal, comprising the sale of the consumer businesses of Citibank India, which includes credit cards, retail banking, wealth management and consumer loans, as well as sale of consumer business of Citi's non-banking financial company, Citicorp Finance (India) Ltd, comprising the asset-backed financing business, which includes commercial vehicle and construction equipment loans, as well as the personal loans portfolio.
"Axis Bank looks at this acquisition as a healthy strategic fit," itt said in a statement.
"It will gain access to the large and affluent customer franchise of Citibank having a bouquet of fee-oriented and profitable segments, that include quality credit card portfolio, affluent wealth management clientele, meaningful deposits with 81 per cent being CASA, along with a strong consumer lending portfolio."
Post the acquisition, Axis Bank will have 28.5 million savings accounts, over 2.3 lakh 'Burgundy' customers and 10.6 million cards.
"With all the required capabilities in place, it expects successful integration across all key parameters including employees, customers, product offerings and technology in a value accretive manner.
"Additionally, the deal offers strategic advantages to the bank such as premiumisation of its overall customer portfolio, increased opportunities to cross-sell its products and accelerated digital transformation."
The acquired portfolio would increase Axis Bank's credit card customer base by 31 per cent with an additional 2.5 million cards.
"Moreover, the wealth and private banking portfolio will add great value to the 'Axis Burgundy business, further accelerating its growth ambitions in that segment. On an overall basis, the proposed transaction will add 7 per cent to the Bank's deposit base and 4 per cent increase in advances."
The statement said that a well-outlined 'Integration Plan' and a focused senior execution team "will ensure smooth transition and seamless integration on all fronts, in collaboration with Citibank".
"The team comprising specialists with expertise in operationalising large-scale integration programs will focus on 'Customer Service, Personnel, Systems & Technology', and other synergies."
Axis Bank is presently the third largest private sector bank in India.