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Citibank: Axis bank likely to pay Rs 12,325 crore to Citibank in Jan-Mar

is expected to make the payment to Citibank in the January-March quarter for its ₹12,325 crore purchase of the US bank’s consumer business in India, as it looks to close the deal before the end of this fiscal year.

The deal was announced in March this year. Despite Citi losing market share on credit cards in India, Axis Bank says attrition of employees and customers in the business it was acquiring was within manageable limits.

“We are now working towards what is called legal date one, which is when the balance sheet, people and customers move to us and we will pay the consideration to Citibank,” Axis Bank deputy managing director Rajiv Anand told ET. “We are expecting closure somewhere in the last quarter of FY23, which is January to March next year (2023).”

In March this year, Axis Bank said it agreed to acquire Citi’s India retail business, totalling about ₹27,400 crore. The lender is also acquiring Citi’s deposits of ₹50,200 crore. The deal includes the credit card, wealth and retail banking operations of both Citibank India and Citicorp Finance.

While Axis Bank will pay ₹12,300 crore in cash directly as the price of the business, capital investment of ₹3,500 crore and integration cost of ₹1,500 crore will add up to a total of ₹17,300 crore. Axis Bank will inherit more than 1,600 corporate salary account relationships, as well as gain access to seven offices, 21 branches and 499 ATMs Citi now has in India.

While analysts tracking the sector have raised concerns over Citi’s falling market share, Axis Bank said its performance was trending in line with the assumptions it had made at the time of signing the deal. “When we looked at this transaction, we did anticipate some degree of attrition both in terms of people as well as customers. From everything that we know and hear publicly, the numbers of attrition on both are within the comfort zone that we have,” Anand said.

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