Private lender Axis Bank may be the highest bidder for the retail business of Citibank India, CNBC TV 18 reported citing sources on December 20.
Axis is likely to strike an all-cash deal for Citi's India retail assets, which could be worth $1.5 billion with up to $300-400 million milestone payments which depends on performance in the future, the news channel learnt from persons familiar with the development.
Citi, while reacting to the CNBC TV18 report which suggests that Axis may be leading the acquisition race, said: "We continue to move forward with our process with respect to our India consumer business in accordance with our broader strategic refresh."
Axis was yet to issue a statement by the time this report was published.
The news comes amid reports which claimed that Kotak Mahindra Bank and Indusland Bank, apart from Axis Bank, were in the race to acquire Citi's India retail business which involves over 2.5 million customers and more than 1.2 million bank accounts.
Also Read | Citibank's retail assets good bet for local contenders to bolster existing affluent customer base, says CLSA
On December 7, a report in The Economic Times claimed that Kotak Mahindra Bank and Axis Bank have emerged as the top contenders to clinch the deal. The report, citing a source, said Kotak was more "aggressive" between the two bidders.
The deal will likely be all cash of less than $2 billion, the source had told the publication.
Notably, Citibank runs a profitable franchise in India and had a loan book of Rs 68,800 crores as on March, 2021, of which Rs 28,000 crore was retail loans. These mainly included cards, mortgages and personal mortgages, said a report released by investment group CLSA on September 8.
Citibank is the sixth largest card issuer with market share of 4.2 per cent in cards issued, the report added. As per CLSA's estimates, Citibank could have a credit card book of approximately Rs 9,000 crore.
On 16 April, Citi said it will exit consumer/retail operations in 13 countries across Asia and Europe. The 13 nations include Australia, Bahrain, China, India, Indonesia, Korea, Malaysia, the Philippines, Poland, Russia, Taiwan, Thailand and Vietnam.
Citi’s consumer business in India comprises credit cards, retail banking, home loans and wealth management. The bank has 35 branches in the country and employs 4,000 people in the consumer banking business. It had a 0.6 percent market share in advances and 1.1 percent in deposits, along with 2.58 million credit cards outstanding, as of October 2021.
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