"While the assets have good value, I think they got an even better deal on the liability side."Īpart from the $1.6 billion being paid in cash, Axis will also need to set aside around 35 billion rupees ($461.07 million) for loan provisions and other regulatory requirements related to the deal. "It looks like a sweet deal for Axis," said Anand Dama, a banking analyst with Emkay Global Financial Services. The lender expects the purchase to increase its deposit base and loan book by 7% and 4%, respectively, while reducing its capital adequacy ratio by 180 basis points to 13%. read more 'SWEET DEAL'Īxis Bank, India's third-largest private lender, will also gain access to Citi's local wealth management arm in the deal. The sale advances Citi Chief Executive Jane Fraser's plan to overhaul the bank by exiting retail banking operations in 13 countries where it does not have the necessary scale to compete. "The acquisition strengthens our market position, reduces gap in key segments with peers and provides opportunity to accelerate retail business growth," Amitabh Chaudhry, managing director and CEO of Axis Bank, said at a press conference.Ĭiti was among the first international lenders to introduce credit cards in India in 1987, but its market share, according to Macquarie, has dwindled to 4% from 13% a decade ago. The deal announced on Wednesday is Axis Bank's largest by far and would expand its credit card customer base by 31%, narrowing the gap with the third-biggest player ICICI Bank (ICBK.NS). MUMBAI, March 30 (Reuters) - Indian private lender Axis Bank (AXBK.NS) has decided to bulk up its credit card and retail businesses with a $1.6-billion purchase of Citigroup Inc's (C.N) local consumer banking arm. Axis' capital adequacy ratio to drop 180 bps.Deal marks Axis Bank's biggest purchase.Citi advances plan to exit consumer business in 13 markets.
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