Full integration with Citi within 18 months, says Axis Bank CEO

Axis Bank's Managing Director and CEO Amitabh Chaudhry said the acquisition has been funded entirely from the bank's balance sheet.

Axis Bank, citibank, Axis Bank's Managing Director and CEO Amitabh Chaudhry, Indian express, Opinion, Editorial, Current Affairs

“We don't need any capital to pay for this deal. The numbers are better than our expectations for Citi's staff joining the Axis Bank's platform. Changes in key parameters largely remain along the expected lines. We will complete the full integration seamlessly within 18 months post this date (March 1, 2023),” Chaudhry said.

Private lender Axis Bank, which completed the acquisition of Citibank India’s consumer business on Wednesday, said the full integration of the acquired business will be completed within 18 months.

Axis Bank’s Managing Director and CEO Amitabh Chaudhry said the acquisition has been funded entirely from the bank’s balance sheet.

The sale,which Citi and Axis announced in March 2022, includes credit cards, retail banking, wealth management and consumer loans.

“We don’t need any capital to pay for this deal. The numbers are better than our expectations for Citi’s staff joining the Axis Bank’s platform. Changes in key parameters largely remain along the expected lines. We will complete the full integration seamlessly within 18 months post this date (March 1, 2023),” Chaudhry said.

He said Axis Bank will take one time charge of Rs 1,500 crore in Q4 FY2023 on its profit and loss (P&L) statement for goodwill including intangible amortisation, policy harmonisation cost, provisions in areas where the lender’s policies are more prudent and conservative, and implementation expenses such as permission cost and taxes.

The total transaction cost for the acquisition of Citibank stood at Rs 11,603 crore as against Rs 12,325 crore announced last year.

“The cash purchase consideration for acquisition based on the closing position of Axis as on January 31, 2023 stood at Rs 11,603 crore. This cash consideration is subject to true up and true down basis adjustments for changes in the business position from January 31, 2023 to end of day on February 28, 2023,” Chaudhry added.

Story continues below this ad

For Axis Bank, there will be an addition of aggregate deposits of Rs 39,900 crore for Axis, which is lower than Rs 50,200 crore announced last year.

“We obviously had attrition because we went and sought consent from customers. There is also a change in business cycle from diligence period to closure (of transaction),” he said.

With the acquisition, Axis Bank got 2.4 million Citibank customers. The bank has retained Citibank’s 3,200 consumer banking employees.

The transaction did not include Citi’s institutional client businesses in India.

Story continues below this ad

“We remain focused on capturing the India opportunity by growing our already very strong institutional clients’ businesses, and supporting our global operations with the country’s exceptional talent base through our network of five Citi Solutions Centers,” Citi India CEO Ashu Khullar said.