Axis Bank scoops up Citi India’s retail assets, including the lucrative credit card business, for $1.6 billion

  • Axis Bank, one of the largest private lenders in India, has emerged successful in acquiring Citi India’s retail assets, beating Kotak Mahindra Bank to the punch.
  • The acquisition includes the lucrative customer base of 2.58 million credit card holders, who spend nearly a third more than the industry on average.
  • From raw numbers to synergy gains and more, here’s everything that Axis Bank gains in its acquisition of Citi India’s assets.

Axis Bank has acquired Citi India’s retail assets, including the company’s lucrative credit card business, for $1.6 billion. This is an all-cash deal, according to a statement issued by Citi.

Citi added that it expects the deal to close by June 2023, subject to regulatory approvals. As part of the deal, approximately 3,600 Citi India employees will also be absorbed by Axis Bank. Analyst estimates had pegged this figure at 4,000 earlier.

“This is a positive outcome for our staff and our priority has been securing their future. 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,” said Citi India’s chief executive officer, Ashu Khullar.

Earlier, both Axis Bank and Kotak Mahindra Bank were said to be in a neck-to-neck race to acquire Citi India’s retail assets.

Particulars In numbers
Branches 35
Employees 4,000
Credit card holders 2.58 million
Retail customers 2.5 million
Loan accounts 1.2 million

Source: Edelweiss Research, CLSA

Is $1.6 billion a fair value for Citi India’s retail assets?

“CitiBank has a rich clientele across the credit card and wealth management segments, so it is understandable that the acquisition is at a premium. Axis Bank will have to manage the synergy gains well enough for this acquisition to prove useful,” Kranthi Bathini, Director, Equity Strategy at WealthMills Securities, had told Business Insider in an earlier interaction.

Essentially, the question whether the price is fair will be answered once we know what more Axis is able to sell to Citi’s customers. Analysts at Edelweiss Research also echoed this point of view.

But there is still a lot for Axis Bank to gain from buying out Citi’s India operations. This is explained in three charts below.

Where does Axis Bank stand in the credit card industry?

Axis Bank is the fourth largest player when it comes to credit cards, standing behind HDFC Bank, SBI and ICICI Bank.

Credit Card market share as at Feb 2022RBI / Business Insider India / Flourish

Citi India comes in at the sixth place with a market share of just under 4%.

However, it’s not only the credit card numbers that matter in this case, it’s also the value of transactions that each card issuer processes.

Axis Bank scoops up Citi India's retail assets, including the lucrative credit card business, for $1.6 billion
Credit Card spends​RBI / Business Insider India / Flourish​

While Axis Bank has three times the number of card holders that Citi does, the value of transactions it processes is only a little over two times higher.

Post the acquisition, Axis would be in a neck-to-neck fight with ICICI Bank to become the third-largest card issuer, while in terms of credit card spends, it would account for nearly 13% of the total.

What exactly does Citi bring to the table?

According to a report by Edelweiss Research, Citi India’s credit card holders spend 30% more when compared to the industry average.

Axis Bank scoops up Citi India's retail assets, including the lucrative credit card business, for $1.6 billion
Average credit card spendsCompany Reports / Edelweiss Research / Business Insider India / Flourish

Citi India’s credit card holders spend twice as much as Axis Bank’s – an equation that would have contributed significantly to Axis paying a premium to acquire Citi India’s retail assets.Post-acquisition, Axis Bank would see its average credit card spends per user increase by nearly 23%, which could prove to be a significant boost for the company.


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