Axis&Citi Bank Merger :- Acquisition of Citi India's consumer business to boost Axis bank franchise
According to the experts this merger will benefits axis bank to get a good and more strong hold in Indian Market.
Axis bank announced that Us based Citi bank and Axis bank has a deal where axis is acquiring Citi bank’s Indian Market business of credit cards, consumer loans and retail Banking . Axis and Citi had this deal in 12,325 crores deal. Citi and axis have a very big and good amount of customer based in Indian.
Where few of expects have shared that axis will get benefits only after 2025 Financial year. And this merger is very much beneficial for axis as it get a huge customer based and also a premium class customer addition in their customer based.
Global rating agency S&P said on Friday. Axis bank's planned acquisition of Citi group's consumer banking port folio will strengthen its retail market position as well as diversity the revenue profile. The acquisition and integrate the assets likely to be completed over the next nine to 12 months, while full integration will take another 18 months "the agency said in a statement. We expect significant profitability improvement to only accrue from fiscal 2025 onwards as it will take time to complete. The acquired portfolio, is equivalent to about 4 per cent of Axis bank's loans and it comprises credit card, mortgage loans, personal loans, asset backed finance and small business banking loans. Axis bank should be able to absorb any incremental risk given the small size of Citi's portfolio. It said adding a large part of the portfolio is unsecured , where yields are higher then mortgages.
The acquisition is positive for axis bank's long profitability Citi's spending per credit card is higher than axis bank's as well as the average for Indian banks. Citi's portfolio mainly comprised affluent clients, where credit quality tends to better than mass market customers. "Despite the deterioration, we expect the RAC ration to stay sufficient for its rating" It said. The bank earning will remain and it enjoy good access to markets.
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