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Axis Bank buys Citi’s India retail operations for $2 billion, announcement expected soon

Axis Bank

In India, Axis Bank is the third-largest private sector bank. The Bank caters to a wide range of customer groups, including large and mid-sized businesses, small and medium-sized businesses, agriculture, and retail businesses.

Axis Bank commenced operations in 1994 after the Indian government approved the establishment of new private banks. The Administrator of the Unit Trust of India (UTI-I), Life Insurance Corporation of India (LIC), General Insurance Corporation Ltd., National Insurance Company Ltd., The New India Assurance Company, The Oriental Insurance Corporation, and United India Insurance Company mutually promoted the bank in 1993. The Unit Trust of India has a unique place in the Indian capital markets, having supported several of the country’s prominent financial organizations. 

Axis Bank selects AWS for digital banking transformation

The biggest and greatest financial institution in the country, UTI, has supported Axis Bank Ltd. The bank was founded with Rs. 115 crore capital, with UTI investing Rs. 100 crore, LIC contributing Rs. 7.5 crore, and GIC and its four subsidiaries each adding Rs. 1.5 crore. In 1994, Axis Bank became one of the first new-generation private sector banks to open its doors. 

The Bank excels in both retail and corporate banking, and it is dedicated to achieving excellence by implementing best industry practices from all over the world. In November 2010, Axis Bank agreed to pay $456 million for Enam Securities’ investment banking and equities divisions. Axis Securities, Axis Bank’s equities arm, will merge with Enam Securities’ investment banking division. Enam’s investment banking, institutional equities, retail equities and financial product distribution, and non–banking finance companies will be demerged and merged with Axis Securities under the terms of the agreement.

Citibank

Citibank, a global banking brand with a customer count of hundreds and millions of people, began with the name the City Bank of New York. The bank, which is known for its efficient operations and services, is based in the United States, with close to 26% of its shares and client base coming from the nation. Apart from banking, they provide a variety of services. Insurance, credit cards, and other related services fall under this category. Citibank is best recognised for its online banking services. Citibank is believed to have at least 15 million active online customers who use Citibank as their primary internet banking partner.

Axis Bank Citibank news: Axis Bank set to buy Citi's India consumer  business; deal to be announced soon

The City Bank of New York was formed in 1812 by Samuel Osgood, who also served like its first president. The owner’s firm employed it as a treasury and financial service. Citi became a part of the US financial system in 1863, and by 1868, it was one of the country’s major banks. Citibank was the first bank to open branches outside of the United States after the Federal Act was passed, with offices in London, Shanghai, and Calcutta. In 1976, the corporation was renamed Citibank. It had managed to form its own holding company and become a full-fledged Citicorp subsidiary.

The bank was one of the first to utilise ATMs and was one of the first in the world to leverage technology for its services. Their ATMs were accepted in seven-elevens across the United States in 1970. Citibank was also one of the first businesses to provide online banking services. Years later, in 1991, with the advent of the World Wide Web, they launched their website. It gave its customers instant internet access to their accounts by 1995.

Citibank recently confirmed that it would be divided into two companies: Citicorp and Citi Holdings Inc., with Citicorp handling traditional banking and Citi Holdings Inc. handling non-banking services including brokerage and asset management. Citigroup too agreed to pay a $285 million punishment in 2012 for a civil action penalty. However, they were able to perform brilliantly in the following years, winning The Banker’s annual Award for Global Bank of the Year. 

Axis Bank buys Citi’s India retail operations for $2 billion

In a deal worth over $2 billion, Axis Bank has bought Citi’s India retail business. According to the Economic Times, the private lender is expected to disclose the deal soon. The transaction will be subject to regulatory approval. According to the news agency PTI, the sale is worth more than Rs. 18,000 crore ($2.5 billion). As part of its worldwide strategy, the New York-based banking giant declared its intention to abandon consumer activities in select nations, including India.

Citi's India retail unit can add heft to Kotak, be a good buy for HDFC Bank:  CLSA - The Economic Times

In October 2021, several banks, including Axis Bank, HDFC Bank, Kotak Mahindra Bank, IndusInd Bank, and DBS India, placed bids to buy Citi’s India retail division. Citi has asked for more than $2 billion for the company, which generates $1 billion in sales. The bank lost a considerable amount of market share, causing some value concerns. Despite a promising book, it was thought that the foreign lender was unable to recruit quality consumers in India.

Under CEO Jane Fraser’s leadership, the American banking behemoth opted to quit 13 markets to save capital and focus on higher-yielding revenue streams. Its customer portfolio accounts for around a third of its overall earnings from India operations, which add 1.5 per cent to the company’s worldwide revenue.

Citi has 68,747 crores in loans and 1.66 trillion in deposits in India till March 31, 2021. According to Reserve Bank of India data, the country’s total number of credit cards was 2.55 million in February (RBI). Citigroup said in April of last year that it will abandon consumer operations in 13 countries, including India, to focus on four wealth centres: Singapore, Hong Kong, the United Arab Emirates, and London. Citigroup stated that the decision, which was made as part of an ongoing strategic review, will allow the company to focus its assets and resources on the businesses with the most size and development potential.



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