How Axis Bank gains from Citibank: It's about quality of customers

The quality of customers it acquires holds the key to success but the benefits of the buyout could kick in only from FY25

Axis Bank’s acquisition of Citibank’s consumer finance business for Rs 12,325 crore — the second biggest deal in the Indian banking sector — is seen as a good deal at a good price. The acquisition enables Axis Bank to close the gap with competition in some key segments such as credit cards.

At the same time, there are some key issues that are crucial for the deal’s success, apart from the fact that it will take some time for Axis to reap the full harvest of its investment.

First, look at what Axis gains. The deal includes Citi’s credit cards,