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Axis Bank-Citibank Deal - Good Cross Sell Opportunities But Customer Retention A Key: Prabhudas Lilladher

Axis Bank-Citibank Deal - Good Cross Sell Opportunities But Customer Retention A Key: Prabhudas Lilladher

<div class="paragraphs"><p>An employee at an Axis Bank Ltd. branch in Mumbai. (Photographer: Dhiraj Singh/Bloomberg)</p></div>
An employee at an Axis Bank Ltd. branch in Mumbai. (Photographer: Dhiraj Singh/Bloomberg)

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Prabhudas Lilladher Report

The much awaited Axis-Citi deal was announced yesterday, wherein Axis Bank Ltd. will acquire Citibank’s self-funded consumer businesses for Rs 123 billion.

Deposits/assets to be purchased will be Rs 502 billion/274 billion with credit card portfolio of Rs 89 billion. Rationale for the deal is-

  1. building a premium base of customers and increasing granularity,

  2. Citi’s portfolio complementing that of Axis Bank, as both entities have different customer profile and

  3. good cross sell opportunities for Axis Bank which would eventually lead to synergies.

In our view, the deal is positive for Axis Bank in medium term, however the key is customer retention. With systemic asset quality risk receding and credit growth prospects improving, Axis Bank could be one of the main beneficiaries.

Click on the attachment to read the full report:

Prabhudas Lilladher Axis Bank Update.pdf

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