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 US$2.5 billion, people familiar with the matter said.
An agreement for the consumer unit could be announced within the next few weeks, and is contingent on approval from the Reserve Bank of India, the people said on the condition of anonymity.
The deal would include a cash component of less than US$2 billion, accounting for the consumer business’ liabilities, they said.
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The Indian lender emerged as the buyer after beating out rivals, with factors such as job security for Citigroup employees and competition concerns being taken into account, one of the people said.
Axis Bank would need about 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.
The planned India retail sale is said to be a part of a restructuring to simplify the US 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.
Mumbai-based Axis Bank said last month 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 COVID-19 pandemic helped revive consumer demand.
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