Citigroup announced on Wednesday that it will sell its India retail business, which includes banking, credit cards, home loans, and wealth management, to private lender Axis Bank for $1.6 billion.
Subject to customary closing adjustments, Axis Bank will pay Citi a cash consideration of approximately $1.6 billion for the acquisition of the consumer business.
The transaction involves the sale of Citibank India’s consumer banking businesses, which include credit cards, retail banking, wealth management, and consumer loans.
The transaction also includes the sale of Citicorp Finance (India) Ltd’s consumer business, which includes the asset-backed financing business, which includes commercial vehicle and construction equipment loans, as well as the personal loans portfolio.
It does not include Citi’s institutional client businesses in India; Citi remains committed to and focused on serving institutional clients in India and around the world.
In addition, approximately 3,600 Citi employees who support the consumer businesses in India will be transferred to Axis upon completion of the proposed transaction.
Subject to regulatory approvals, the transaction is expected to close in the first half of calendar year 2023. This announcement is only the beginning of a process, and while there will be a transition, Citi will work to make it as smooth as possible and with as much notice as possible. There will be no immediate impact on Citi’s consumer businesses in India’s services to customers.
Citi anticipates that the transaction will result in the release of approximately $800 million of allocated tangible common equity upon closing. Citi’s global exit from its consumer banking franchises in 13 markets across Asia and EMEA, as previously announced, is expected to release approximately $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 Peter Babej, CEO of Citi Asia Pacific.
