Axis Bank Ltd. is nearing a deal to buy Citigroup Inc.’s India retail banking business in a transaction that could be valued at about $2.5 billion, people familiar with the matter said.
An agreement for the consumer unit may be announced as soon as the next few weeks and is contingent on approval from the Reserve Bank of India, the people said, asking not to be identified as the information is private. The deal would include a cash component of less than $2 billion, accounting for the consumer business’s liabilities, the people said.
The Indian lender emerged as the buyer after beating out rivals, with factors such as job security for current Citigroup employees and competition concerns being taken into account, one of the people said. Axis Bank will need around six months to merge its consumer business in the country with Citigroup’s, a different person said.
While talks are advanced, as with all deals, an agreement could be delayed or fall apart. Representatives for Axis Bank and Citigroup declined to comment.
For Citigroup Chief Executive Officer Jane Fraser, the planned India retail sale is part of a restructuring to simplify the U.S. lender, do away with its retail banking operations in 13 countries across Asia and Europe, and focus on high-growth businesses such as wealth management. Axis Bank, India’s third largest private sector lender, has been trying to boost retail loans to tap pent-up demand after the first two waves of Covid-19.
Axis Bank Ltd based in Mumbai, said in January that quarterly profit more than tripled on robust earnings from lending and its non-core business including fees and trading, as the easing of the coronavirus pandemic helped a revival in consumer demand.