Axis Bank closes Citi India deal at lowered price of $1.41 billion

By Siddhi Nayak and Chris Thomas

MUMBAI (Reuters) -Indian private lender Axis Bank Ltd said on Wednesday it completed a deal to buy Citigroup Inc's local consumer and non-banking finance businesses, marking the U.S. lender's exit from its credit card and retail businesses in the country.

The deal was closed at a slightly lower sum of 116.03 billion rupees ($1.41 billion) due to Citi's customer attrition and a fall in deposit base, Subrat Mohanty, Axis Bank's group executive of banking operations and transformation, said at a briefing.

The deal, when announced in March 2022, was worth 123.25 billion rupees.

The acquisition is expected to add 2.4 million Citi customers to Axis Bank, less than the initially announced 3 million.

The lender's credit card customer base will rise by about 19% with an eventual addition of 1.8 million cards, also lower than earlier estimates of 2.5 million.

Axis Bank does not expect large attrition from here on, Mohanty said. The bank said its market share in cards will increase to 16.2% from 11.4%.

Axis Bank will not need to raise any fresh capital to fund the deal, said Chief Executive Amitabh Chaudhry, adding that capital adequacy remained strong.

He saw a net impact of around 170 basis points to the common equity tier 1 ratio from the deal.

The bank's CET1 ratio stood at 15.55% as of December 2022.

Citi was among the first international lenders to introduce credit cards in India in 1987, but lost ground to larger players over the years.

It still had a higher annual spend per card than Axis Bank. The deal may lift Axis' spend per card by around 10%.

In 2021, Citi Chief Executive Jane Fraser announced plans to exit its consumer businesses in 13 Asian and EMEA markets.

The transaction is expected to result in a regulatory capital benefit of $1.4 billion, said Citi.

Axis Bank's shares rose 2.5% on Wednesday. They have risen about 15% since the deal was announced last year.

($1 = 82.4460 Indian rupees)

(Reporting by Chris Thomas and Siddhi Nayak; Editing by Sherry Jacob-Phillips, Savio D'Souza and Sohini Goswami)