Axis seals the Citi deal!
Axis Bank Ltd surges after the announcement of the acquisition of Citibank’s consumer businesses in India.
India’s third-largest private sector bank Axis (according to current market cap), has successfully purchased Citibank’s consumer banking business for USD 1.6 billion or Rs 12,325 crore in an all-cash deal.
Axis will take over Citibank’s loans, wealth management and retail banking operations. Post the acquisition, Axis Bank will have 28.5 million saving accounts, 2.3 lakh plus Burgundy customers and 10.6 million cards. This leads to an increase in the bank's credit card customer base by 31%, creating a position in the top 3 players in the market. The wealth and private banking will accelerate the Axis Burgundy business with a 12% increase in CASA and a 4% increase in advances.
Apart from this Axis is likely to employ approximately 3600 Citi employees. The entire procedure including regulatory approvals and incorporation of customers is expected to be complete within 12-18 months. This deal offers strategic advantages like a step up in its customer portfolio, growth in cross-selling of products and rapid digital transformation.
This deal has received a positive response from investors as the share price of this largecap has ended at 761.20, up by 11 points or 1.47%. Analysts are hoping for a positive outcome from this deal as it will help Axis expand, that might push its share price upwards. The 52-week high for this stock is 866.60, and the 52-week low is 626.40.
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