Axis Bank has become the favorite to buy Citi’s consumer business in India, which is valued at around $1.5 billion in a deal expected to take place this month, according to two sources. direct knowledge of the matter.
Another Indian lender, Kotak Mahindra Bank is still in the running but has submitted a lower bid to Axis Bank and therefore ranks second in Citi’s order of preference, the sources told Reuters.
Axis Bank and Kotak Mahindra Bank did not immediately respond to requests for comment.
“We continue to advance our process regarding the sale of our consumer business in India in line with our broader strategic refresh,” Citi India said in response to an email query about the status of the deal.
Wall Street giant Citi said last year it would exit its consumer franchises in 13 markets, including India, as it refocuses on its more lucrative institutional and wealth management businesses. Its consumer banking business in India includes credit cards, home loans and retail banking.
The acquisition of the assets would bolster the premium credit card and mortgage businesses of Axis Bank, India’s third-largest private lender, ICICI Direct analysts said in a note.
“Acquiring Citi’s retail business in India would further help Axis Bank expand its reach and create more opportunities,” they added.
Citi has been present in India for decades and was among the first banks to introduce Indians to credit cards in 1987.
It had a portfolio of 2.57 million credit cards in the country in November, according to India’s central bank, while Axis Bank’s card portfolio exceeded 7.9 million. Even though Axis has more cards, Citi reported higher spending per card.
Citi’s total retail loan portfolio in India was 216 billion rupees ($2.91 billion) for 2021, Systematix Institutional Equities said in a report last month.
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