Axis Bank to buy Citi’s India consumer business for $1.6 bln

Indian private lender Axis Bank (AXBK.NS) is buying Citigroup Inc’s (C.N) local consumer banking arm for $1.6 billion in its biggest deal to beef its credit card business.

The sale by Citi is part of Chief Executive Jane Fraser’s push to overhaul its business by exiting retail banking operations in 13 countries where it does not have the necessary scale to compete. read more

Citi was one of the first international lenders to introduce credit cards to Indians in 1987, but its market share, according to Macquarie, has dwindled to 4% from 13% a decade ago.

Still, Axis would benefit from the deal as its gets access to 2.6 million Citi cards which on average have higher spend than cards of rival Indian banks.

As part of the sale, 3,600 Citi employees would move to Axis. The deal follows a months-long auction process that included a rival bid from Kotak Mahindra Bank (KTKM.NS).

The interest in Citi’s assets underscores Indian banks’ growing appetite for businesses such as credit cards and mortgages that could help lock in long-term income growth.

The sale is expected to close in the first half of next year and excludes Citi’s institutional client businesses in India.

Citigroup had earlier issued a statement on the sale, which the bank later asked news distributor BusinessWire to recall because it was prematurely issued. BusinessWire said it was not aware of any inaccuracy.

Citi did not respond to a request for comment. Axis separately announced the deal on the Bombay Stock Exchange. (https://bityl.co/BXqP)

($1 = 75.8840 Indian rupees)

Reporting by Chris Thomas in Bengaluru; Editing by Maju Samuel and Aditya Soni

This article was originally published by Reuters.