Citigroup’s retail operation is expected to be purchased by Axis Bank

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According to sources familiar with the matter, Axis Bank Ltd. is close to finalizing a deal to buy Citigroup Inc.’s India retail banking division for $2.5 billion.

The agreement for the consumer business could be disclosed as soon as the next few weeks, subject to Reserve Bank of India approval, according to the people, who asked not to be identified because the information is confidential. According to the people, the purchase would include a cash component of less than $2 billion to cover the consumer business’s liabilities.

After beating out competitors, the lender was chosen as the buyer, with criteria such as job security for present Citigroup workers and competition concerns taken into account, according to one of the sources. According to a second source, Axis Bank’s consumer division in the country will take about six months to integrate with Citigroup.

While talks are progressing, an agreement could be delayed or break apart, as with any arrangement. Axis Bank and Citigroup representatives declined to comment.

The planned India retail sale is part of a restructure by Citigroup Chief Executive Officer Jane Fraser to simplify the US lender, eliminate its retail banking operations in 13 countries spanning Asia and Europe, and focus on high-growth sectors such as wealth management. After the first two waves of Covid-19, Axis Bank, India’s third- largest private sector lender, has been attempting to raise retail loans to harness pent-up demand.

Axis Bank, based in Mumbai, reported a more than threefold increase in quarterly profit in January, owing to strong revenues from lending and non-core businesses such as fees and trading, as the coronavirus pandemic eased, boosting consumer demand.

On behalf of the Indian government and various state governments, Axis Bank provides transaction banking products and services to customers in the areas of current accounts, cash management, capital market services, trade, foreign exchange and derivatives, cross-border trade, and correspondent banking services, and tax collections.

Through its owned subsidiaries, the bank provides investment banking and trusteeship services. Axis Capital Limited is an investment banking firm that specializes in equity capital markets, institutional stock brokerage, and mergers and acquisitions advising.

Axis Trustee Services Limited is a trustee that acts as a debenture trustee as well as a trustee for a variety of securitization trusts.

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