Bank Axis and Chief Executive Officer Chief Executive Officer Director Chaudhry on March 30 is called the Bank’s steps to acquire the Indian Citibank consumer business as a “lifetime agreement”. Purchases will provide access to Bank Axis to 2.5 million Citibank customer cards and will produce an increase of around 31% to the existing card base.
Transactions will help lenders in increasing the card spent by a market share of 480 basis points, MD said. “Citibank has a free and quality portfolio of nearly 2.5 million cards with the highest monthly expenses per card throughout the industry and book size around Rs 8,900 Crore in June 2021,” he added.
Furthermore, install the conclusion of the transaction, combined assets in the business management of Axis Bank’s wealth management will increase by 42%, making it the third largest wealth manager in the country, according to Chaudhry.
The ratio of the Account Account of Demand Deposit and Joint Savings, based on Proforma, after the settlement of the transaction will increase by 200 basis points to 47% and it will also be the ratio of the coverage of liquidity, the word management said.
“The consumer loan portfolio around Rs 18,500 Crore consists of mortgages, finance supported by assets, small business loans, and personal loans. This is our focus segment too and will deepen our relationship in this space by offering a different financial solution,” MD said.
Apart from the improvement in the CASA ratio, net interest margin, and credit card market share, this agreement will also provide Axis Bank access to the set of premium customers of high expenditure.
Overcoming a press conference today, Chaudry said Axis Bank has grown organically for years and scaly well but its aspirations are greater. “This agreement gives us a strategic encouragement to close the gap between us and some of our colleagues. We hope this special acquisition will improve the quality of our franchise in many meaningful parameters,” he said.
When asked whether the bank would collect capital to fund this acquisition, Chaudhry said the bank intended to pay this transaction from the balance sheet itself. However, continuing to advance depending on credit demand and macroeconomic conditions, the bank will see an increase in capital.
On the question of how the bank aims to overcome the problem of Citibank India customer friction, Chaudhry said according to the data distributed by Citi with banks, customer retention rates remained satisfying.
“Obviously there is a risk that there may be customer friction. We believe it is very strong that the AXIS Bank has a series of products and services greater to offer to Citibank customers. Citibank is limited by the presence of branches, the allowance that can be offered, AXIS Bank has more to offer, “He said.
He added that there is a mechanism that is tailored to a certain price which is part of the agreement that will kick if the customer friction exceeds certain numbers.
