Citi has agreed to sell its India-based consumer business to Axis Bank Limited after “an extensive and competitive auction process,” according to a Wednesday (March 30) press release.
Axis Bank will acquire Citibank India’s consumer banking businesses, including credit cards, retail banking, wealth management and consumer loans. The deal also includes the consumer business of Citi’s non-banking financial company, Citicorp Finance (India) Limited, which is made up of the asset-backed financing business, including commercial vehicle and construction equipment loans and the personal loans portfolio, the release stated.
About 3,600 Citi employees who support the consumer businesses in India will transfer to Axis when the transaction is finalized, likely in the first half of 2023. Axis will pay Citi about $1.6 billion in the acquisition of the consumer business, subject to customary closing adjustments, according to the release.
Citi said in the release that it expects the deal with Axis to result in the release of about $800 million of allocated tangible common equity. Citi’s global exit from its consumer banking franchises in 13 markets across Asia and Europe, the Middle East and Africa (EMEA) is expected to release about $7 billion of allocated tangible common equity over time.
“Our announced transaction with Axis, a leader in Indian financial services, represents an important milestone for our franchise and offers an excellent opportunity to our consumer banking colleagues in India,” said Citi Asia Pacific CEO Peter Babej in the release. “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.”
Citi is retaining its institutional client businesses in India, according to the release.
Last week, Indian ride-hailing platform Ola announced plans to acquire neobank Avail Finance, which was founded by the brother of Ola’s co-founder. The deal will help Ola Financial Services, a subsidiary of Ola, improve its lending services and offer financial services to India’s underserved blue-collar workers.
Read more: India’s Ola to Acquire Neo Bank Avail
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