Citigroup said on March 30 that private lender Axis Bank will purchase Citibank’s India consumer division for $1.6 billion in an all-cash transaction.
“The transaction also includes the sale of the consumer business of Citi’s non-banking financial company, Citicorp Finance (India) Limited, comprising the asset-backed financing business, which includes commercial vehicle and construction equipment loans, as well as the personal loans portfolio,” Citi said.
Citigroup said the transaction included the sale of Citibank India’s consumer banking businesses, which include credit cards, retail banking, wealth management, and consumer loans.
The deal, however, excludes Citi’s institutional client businesses in India, the statement clarified, adding that “Citi remains committed and focused on serving institutional clients in India and globally”.
The employees who are part of Citibank’s India consumer business, who number up to 3,600, will be transferred to Axis “upon completion of the proposed transaction”, the Citigroup said.
Citi India CEO Ashu Khullar stated that the merger with Axis is a “positive outcome for our staff,” noting that the company’s first objective has been to secure their future.
“We continue to remain committed to contributing to India’s growth and development as we deepen our presence through our institutional businesses and our community initiatives. Citi will also continue to harness India’s rich talent pool in the areas of technology, operations, analytics, finance and allied functional areas through its network of Citi solution centers that are located in five cities in India and support our global businesses,”
Ashu Khullar , CEO Citi India
The transaction comes nearly a year after Citibank declared its intention to quit consumer franchises in 13 regions, including India, and emphasise on more profitable institutional and wealth management businesses. Its consumer banking operations in India include credit cards, housing loans, and retail banking.
Axis Bank emerged as the top buyer, beating out rivals such as Kotak, another private lender that was apparently “more aggressive” and submitted a proposal that was lower than Axis’, CNBC TV18 reported earlier today. Other variables such as job security for present Citigroup employees, competition concerns, and others were weighed in as well, the article stated.
Citigroup stated in a statement that the transaction is “anticipated to close in the first half of calendar year 2023,” subject to regulatory clearances.
Citibank India “will ensure that the transition is as seamless as feasible” to avoid any immediate impact on its consumer businesses clients, it added.
Smrutirekha Bhoi