Axis Bank rises on getting nod to acquire Citibank’s consumer businesses in India

Axis Bank is currently trading at Rs. 758.80, up by 8.60 points or 1.15% from its previous closing of Rs. 750.20 on the BSE.

The scrip opened at Rs. 763.90 and has touched a high and low of Rs. 763.90 and Rs. 751.40 respectively. So far 182028 shares were traded on the counter.

The BSE group 'A' stock of face value Rs. 2 has touched a 52 week high of Rs. 866.60 on 25-Oct-2021 and a 52 week low of Rs. 626.40 on 12-Apr-2021.

Last one week high and low of the scrip stood at Rs. 765.80 and Rs. 715.20 respectively. The current market cap of the company is Rs. 230292.48 crore.

The promoters holding in the company stood at 9.71%, while Institutions and Non-Institutions held 77.65% and 12.64% respectively.

Axis Bank’s board has approved the acquisition of Citibank’s consumer businesses in India. The transaction comprises the sale of the consumer businesses of Citibank India, which includes credit cards, retail banking, wealth management and consumer loans. The deal also includes the sale of the consumer business of Citi’s non-banking financial company, Citicorp Finance (India), comprising the asset-backed financing business, which includes commercial vehicle and construction equipment loans, as well as the personal loans portfolio.

Axis Bank looks at this acquisition as a healthy strategic fit. It will gain access to the large and affluent customer franchise of Citibank having a bouquet of fee-oriented and profitable segments, that include quality credit card portfolio, affluent wealth management clientele, meaningful deposits with 81% being CASA, along with a strong consumer lending portfolio. Post the acquisition, Axis Bank will have 28.5 mn Savings Accounts, 2.3 lakh+ Burgundy customers and 10.6 mn Cards.

The acquired portfolio would increase Axis Bank’s credit card customer base by 31% with an additional 2.5 million cards, which will in turn bolster the Cards balance sheet position to be amongst the top 3 players in the Indian market. Moreover, the wealth and private banking portfolio will add great value to the Axis Burgundy business, further accelerating its growth ambitions in that segment. On an overall basis, the proposed transaction will add 7% to the Bank’s deposit base (with 12% increase in CASA) and 4% increase in advances.

Axis Bank is the third largest private sector bank in India. The bank offers the entire spectrum of services to customer segments covering Large and Mid-Corporates, SME, Agriculture and Retail Businesses.