Axis Bank inching close to takeover of Citi's India consumer business, deal likely this month: Report

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Private lender Axis Bank is inching closer to the takeover of Citibank's India consumer business, with the acquisition deal likely to be finalised this month, news agency Reuters reported on January 17, citing two sources familiar with the development.

Citi's India consumer business is being valued at $1.5 billion in the planned deal, Reuters learnt from the sources. Kotak Mahindra Bank, another private lender which is also in the acquisition race, has submitted a bid lower than Axis Bank's, they reportedly added.

While both the lenders did not react to the Reuters report so far, Citi India told the news agency that it is moving ahead with its plan to offload the consumer retail business in the country.

“We continue to move forward with our process with respect to our India consumer business sale in accordance with our broader strategic refresh,” Citi India was quoted as saying.

Last month, CNBC TV 18 had learnt from sources that Axis Bank 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.

Citi's India retail business involves over 2.5 million customers and more than 1.2 million bank accounts.

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, had said Kotak was more "aggressive" between the two bidders.

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 April 16 last year, 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.