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Dolat Capital Report
Axis Bank Ltd. yesterday completed its acquisition of CitiBank's (India) consumer business including transfer of Rs 273 billion of assets, Rs 400 billion of deposits, and ~3,200 Citi employees.
Post-acquisition Common Equity Tier I ratio at 13.7% is better than anticipated earlier, lowering immediate need of capital raise. While Citi's deposits base and wealth assets under management have declined by 15-20% since the deal announcement, quality of deposits (deposit per account) and spends per card have improved.
The acquisition gives strategic thrust to Axis Bank in closing gap with peers. However, benefits on profitability will accrue only by FY26E given the Rs 20 billion of integration costs to be incurred over next 18 months.
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