Axis Bank, which has emerged as the frontrunner in the race to acquire New York headquartered Citigroup’s retail banking business in India, is closing in on a deal worth around $2.5 billion, according to a report. The cash component in the deal could be less than $2 billion on account of the consumer business’ liabilities, Bloomberg reported quoting sources.

Depending on the approvals by the Reserve Bank of India, Axis Bank may announce a deal in the next few weeks.

Axis Bank had beaten rivals like Kotak Mahindra Bank to emerge as the buyer for Citigroup’s India consumer banking business after easing concerns such as job security for current employees. It will take India's third-largest private bank around six months to merge Citigroup’s consumer business with its own in the country, the Bloomberg report said, quoting a source.

Despite talks being in an advanced stage, the deal could get delayed or fall apart as it happens in many cases, the report added.

Last year, Citi announced plans to wrap up its consumer franchises in 13 markets across Asia and Europe, including India. The Wall Street giant plans to refocus on its more lucrative businesses such as institutional banking and wealth management. Citi’s Indian business comprises credit cards, home loans and retail banking.

Meanwhile, Mumbai-based Axis Bank is looking to boost retail loans to tap pent-up demand following the pandemic. Acquiring Citi’s assets would boost Axis Bank’s credit card and mortgage businesses, Reuters reported earlier quoting analysts at ICICI Direct.

The acquisition would help Axis Bank not just expand its reach, but also create more opportunities for the private bank, the analysts had said.

Citi was among the first banks in the country to introduce credit cards in 1987. As of November 2021, the American lender had a portfolio of 2.57 million credit cards in India, according to the Reserve Bank of India.

In January, Axis Bank said its quarterly profit more than tripled on the back of robust earnings from lending and non-core business, including fees and trading, as consumer demand revived post the easing of COVID-19 pandemic.

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(Edited by : Thomas Abraham)

First Published:Feb 14, 2022 1:35 PM IST