New Delhi 

Citigroup Inc said on Wednesday it would sell its Indian consumer businesses to private lender Axis Bank for $1.6 billion, as the US bank exits retail operations in 13 markets, reported Reuters.

The deal will include the transfer of about 3,600 Citi employees to Axis, and Citi expects the release of about $800 million of allocated tangible common equity after the deal.

The sale excludes Citi’s institutional client businesses in India, it said in a filing. Citigroup-Axis deal closure period is January-June 2023 (1st half of calendar year 2023), a news channel reported.

The deal is part of Citi CEO Jane Fraser’s plan to revamp the lender by exiting retail banking operations in 13 countries and focusing on its more lucrative institutional and wealth management businesses.

Last year, Citi decided to exit retail banking from India and 12 other markets, citing lack of scale to compete. After that decision, Citi decided to sell its assets, which evinced huge interest from several players like DBS Bank, ICICI Bank, Kotak Mahindra Bank, among others.

Axis Bank, which has a credit card base of 8.6 million, will add another 2.55 million from Citi after acquisition. With this deal, Axis will narrow the gap with its main rivals in the credit card business. HDFC Bank is the largest card issuer in the country with 16.27 million cards, followed by SBI Card (13.52 million) and ICICI Bank (12.77 million).

In terms of credit card spend market share, HDFC Bank has 24.8% market share, followed by SBI Card (21.5%) and ICICI Bank (20%) as of January 2022.

Credit cards have been growing very strongly as the country is recovering from the pandemic.

The total number of outstanding credit cards in the system grew 16.3% YoY in Feb 2022, the highest in the past 21 months, to 71.7 million.

Among major players, Kotak Mahindra Bank (KMB) reported strong growth (27.5% YoY), followed by RBL Bank (25.6%), ICICI Bank (23.1%), and Axis Bank (22.2%).

Citi’s consumer business in India comprises credit cards, retail banking, home loans and wealth management.

Citi has 35 branches in India and has more than 2.5 million retail customers in India.