Citibank deal: In no hurry to raise capital, have enough for organic growth, says Axis chief

Amitabh Chaudhry, MD & CEO, Axis Bank

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Axis Bank is “absolutely in no hurry” to raise capital after completing the Citibank deal as the private lender “has sufficient capital for funding organic growth”, managing director and chief executive officer Amitabh Chaudhry said on March 8.

Speaking to CNBC-TV18, Chaudhry also said valuation for Axis Bank’s acquisition of Citi remained competitive and that the price paid “is around the market valuations”.

“Citibank had a 150-year-old franchise, and the valuations remain very competitive. The deal is well priced if you look at the similarly rated companies in the marketplace. We don’t need any capital to pay for this deal. This will be funded entirely from the existing balance sheet,” he added.

Chaudhary’s comments come after the Mumbai-headquartered bank completed the acquisition of Citigroup’s India consumer business for Rs 11,603 crore on March 1, 2023.

The private lender gained Citibank’s 30 lakh unique customers, seven offices, 21 branches and 499 ATMs in 18 cities across the country.

Citigroup has exited retail operations in 13 markets, including India.

Also Read | MC Explains: Axis Bank completes acquisition of Citibank's consumer business. Here’s what it means

Huge Opportunity

Chaudhry sees the Citi acquisition as a “huge opportunity to leverage synergy benefits” and take Axis Bank products to Citi customers and “bring some of Citi’s best practices to Axis customers”.

“We will improve the overall current account savings account (CASA) ratio of the entity; 60 various initiatives has been identified which will improve the quality of the overall franchise. Average deposit per account will improve by 13 percent,” he said.

The combination of the two would add a huge amount of value. There were also various cost benefits from the acquisition of Citibank's retail assets in India. The integration of these assets with Axis Bank would bring significant value to the business, he added.

One such advantage, he said, was that 97 percent of Citi employees joined Axis Bank. “This will ensure a smooth transition and help in retaining the talent pool of Citibank,” Chaudhary said.

Stock Movement

At 12.19 pm Axis Bank was quoting at Rs 858.10 on the BSE, down Rs 1.35, or 0.16 percent. It has touched an intraday high of Rs 860.80 and an intraday low of Rs 853.10.

In the previous trading session, the share closed up 0.75 percent or Rs 6.40 at Rs 859.45. The stock remained flat in the previous week and declined around a percent in the past month.

Axis Bank is the third largest private sector bank in India with a balance sheet size of Rs 12.2 lakh crore as on December 2022. The bank has a 4,849 branch footprint across the country. Retail and SME comprise around 67 percent of its total loans.

Also Read | Axis’ buy of Citi’s consumer business has minimum negative surprise (MC Pro)

Watch the full interview here