Citibank to sell retail business to Axis Bank in $1.6 bln cash deal; no immediate impact on Citi’s customers

India’s third-largest private bank Axis Bank will acquire Citibank’s India retail banking unit, including credit cards business, for $1.6 billion in cash, months after Citi said it will shutter its consumer business in 13 countries, the Nasdaq-listed company said on Wednesday. The deal also includes the sale of the consumer business of Citi’s non-banking financial company Citicorp Finance (India) Limited, it added. Citi said there will be no immediate impact on the services to the customers of Citi’s consumer businesses in India. 

Citi said the deal includes its NBFC’s consumer business, comprising commercial vehicle and construction equipment loans, as well as the personal loans portfolio. The transaction does not include its institutional client businesses in India. 3,600 Citi employees part of the consumer businesses will be transferred to Axis upon completion of the proposed deal. Citi’s Banking, Capital Markets and Advisory Group are acting as the financial advisor to Citi in the deal, which is expected to close in the first half of calendar year 2023. Axis Bank did not immediately respond to a request for comment.

“As we move forward with this transaction, India remains a key institutional market for Citi. In line with our broader strategic repositioning, we will continue to support our institutional clients in this core market and across APAC, delivering the full power of our global network to enable their growth,” Peter Babej, Citi Asia Pacific CEO said.

“Upon closing, Citi expects the transaction to result in the release of approximately $800 million of allocated tangible common equity. As was previously announced, Citi’s global exit from its consumer banking franchises in 13 markets across Asia and EMEA is expected to release approximately $7 billion of allocated tangible common equity over time,” the company said in the statement.

Last year in April, Citi said it would shut down its consumer banking operations in 13 countries including India to refocus on wealth management. In India, Citigroup’s consumer banking business comprises retail banking, credit cards, wealth management and consumer loans. Citi handles 8% of India’s trade flows and 5% of the country’s electronic payments flows.