CCI clears acquisition of Citibank's consumer business by Axis Bank

The Competition Commission of India (CCI) on Tuesday approved the proposed acquisition of Citibank's consumer banking business by Axis Bank.

The ₹12,325 crore deal, which was announced on March 30, comprises the sale of the consumer banking businesses of Citibank India, which includes credit cards, retail banking, wealth management and consumer loans.

The transaction also includes the sale of the consumer business of Citibank's non-banking financial company, Citicorp Finance (India) Limited, comprising the asset-backed financing business, which includes commercial vehicle and construction equipment loans, as well as the personal loans portfolio.

The deal excludes Citibank's institutional client businesses in India.

"The proposed combination involves the proposed slump sale by Citi of an undertaking comprising its consumer banking activities to the acquirer on a going concern basis and the proposed slump sale by Citicorp of an undertaking comprising its consumer banking activities to the acquirer on a going concern basis," the competition watchdog says in a statement.

The transaction also includes around 3,600 Citibank employees supporting the consumer businesses in India, who will transfer to Axis Bank upon completion of the proposed transaction.

Private lender Axis Bank on Monday reported a 91% year-on-year jump in net profit to ₹4,125 crore in the quarter ended June 2022. The bank had clocked a ₹2,160 crore profit in Q1 FY22.

The bank’s net interest income (NII) grew 21% year-on-year to ₹9,384 crore in the first quarter, according to its exchange filing. Net interest margin (NIM) for the quarter stood at 3.6%, up 14 basis points year-on-year and 11 bps quarter-on-quarter.

Axis Bank issued 0.99 million new credit cards in Q1 FY23. The lender has been one of the highest credit card issuers in the country in the last two quarters, with incremental market share of 17%. Credit card spends were up 96% YoY during the quarter.

The lender made specific loan loss provisions worth ₹777 crore in the first quarter compared with ₹602 crore in Q4FY22. The bank held cumulative provisions of ₹11,830 crore at the end of Q1FY23.

As on June 30, 2022 the bank’s reported gross non-performing assets (NPA) and net NPA levels were 2.76% and 0.64%, respectively, as against 2.82% and 0.73% as on March 31, 2022.

The lender’s balance sheet grew 14% year-on-year and stood at ₹11,52,580 crore as on June 30, 2022. Advances grew 14% YoY to ₹7,01,130 crore as on June 30, 2022. The bank’s loan to deposit ratio stood at 87%. Retail loans grew 25% YOY and 3% QoQ to ₹4,12,683 crore and accounted for 59% of the net advances of the bank.