Private lender Axis Bank may experience a significant profit and loss impact in the March quarter due to the Citibank acquisition, The Economic Times reported on March 3 citing analysts.
This is estimated to result in an accounting loss of Rs 5,000 crore to Rs 6,000 crore due to various one-time expenses such as goodwill formation and provisioning policies, as per the report.
"The cash purchase consideration will result in the formation of goodwill which Axis Bank will be writing off entirely in Q4," Suresh Ganapathy, associate director at Macquarie Capital, told ET.
Moneycontrol could not independently verify the report.
The analysts also said that the acquisition is not expected to be profit accretive until the end of 2024 as the bank is expected to incur post-integration expenses of Rs 1,500 crore over 18 months.
Axis Bank on March 1 completed the acquisition of Citibank’s consumer business. The deal, which was announced in March 2022, will see India’s third-largest private sector bank absorbing Citibank’s consumer businesses, covering loans, credit cards, wealth management and retail banking operations in India.
The deal happened after Citigroup in 2021 announced its decision to shutter its retail banking operations in 13 countries, including India, as part of a global business strategy. Axis Bank put out a video advertisement to welcome Citibank’s 30 lakh plus customers on March 1.
Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
Find the best of Al News in one place, specially curated for you every weekend.
Stay on top of the latest tech trends and biggest startup news.
