Wednesday, March 1, 2023

Axis Bank Completes Acquisition Of Citibank Businesses: What It Means For Customers

 

Axis Bank Completes Acquisition Of Citibank Businesses: What It Means For Customers

in a regulatory filing, Axis Bank said it took consent of all the customers.

Axis Bank said on Wednesday that it has completed its acquisition of Citibank's India consumer and non-banking finance businesses. The deal, announced in March 2022, has been closed for a cash consideration of $1.41 billion (Rs 11,630 crore) in one of the largest deals in the Indian financial services space. The acquisition will help Axis close the gap with larger peers like ICICI Bank and HDFC Bank.

From today (March 1), Citibank's home and personal loan, credit card and insurance businesses have now come under the control of Axis Bank.

The acquisition has taken almost a year, after being announced in March, 2022. Just days ago, Citibank took down its signboard from its landmark Kanak Building office on Kolkata's Chowringhee road - the place where the bank started its operations in India in 1902. In 2021, Citigroup announced its plans of exiting 13 international consumer banking markets, shifting its focus to wealth management and away from retail banking in places where it is small.

In a stock exchange filing last week, Axis Bank had informed that it had acquired the consent of Citibank's customers for taking over the business.
What the deal means for Axis Bank?

On its website, the bank had said last year that acquisition of three million unique customers of Citibank in India will enhance its presence in the key identified growth segments. The website also said that Axis Bank's cards balance sheet will grow by 57 per cent with addition of an additional 2.5 million Citibank cards, making it one of the top three cards businesses in the country.

Axis Bank's large loan book would be complemented by Citibank's affluent customer segment, creating product and branch footprint synergies, it added.
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The acquisition will also transfer more than one million customers and an average salary of ₹ 70,000 per month to Axis Bank, which will strengthen its salary business.
What will change for the customers?

Axis Bank said that Citibank's customers will be benefited from its augmented scale, larger geographical reach and width of products and offerings. Axis bank will gain access to seven offices, 21 branches and 499 ATMs across 18 cities in India.

When it comes to card transactions, Citibank is among the leading financial institutions in the country. According to an RBI report, transaction worth ₹ 3,000 crore is carried out by the 2.5 million Citibank credit card users.

Though both the banks have said the customers will not face any issues, reports claims they will have to undergo a Know Your Customer (KYC) routine again. However, this process will be carried out in phases to minimise the inconvenience to customers.
Q3 result of Axis Bank

In the quarter ending December 2022, India's fifth largest lender by market value reported a net profit of ₹ 5,853.1 crore, a jump of 61.9 per cent compared with the corresponding period a year ago.

The bank's net interest income (NII) - or the difference between interest earned and interest paid - increased 32.4 per cent on a year-on-year basis to ₹ 11,459.3 crore, according to a regulatory filing.
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Josep Borrell: ‘We trust Indian (G20) Presidency, country has a very influential voice on world scene’



Ahead of the G-20 Foreign ministers’ meeting beginning on Wednesday, European Union’s High Representative of the European Union for Foreign Affairs and Security Policy (equivalent to Foreign minister) Josep Borrell said on Tuesday that it trusts the Indian Presidency and will support its work towards an outcome that reflects the current extraordinary circumstances.

In an exclusive interview to The Indian Express on Tuesday, Borrell — who is also the Vice-President of the European Commission — while responding to a question on India’s dependence on Russia for defence supplies, said that because of Russia’s war of choice, its economy will be weakened, “Russia will be strapped of cash” and will eventually have to pay for the destruction inflicted on Ukraine. “I leave it up to your judgement if this is a reliable partner,” he said.

Referring to the EU’s Indo-Pacific strategy, Borrell – who was Spain’s Foreign minister between 2018-19 – said while responding to Chinese aggressive behaviour in the region, “it is a positive agenda, not directed against anyone, underpinned by our belief in a rules-based system of world governance and a co-operative approach to international relations”.

Borrell, who has EU’s high representative since 2019 is going to participate in the Foreign ministers’ meeting, when asked about the recent ban on the BBC documentary, also said that from an EU perspective, “freedom of the press, and freedom of expression more broadly, is an essential feature of our open, democratic societies – in Europe as in India”, and it doesn’t shy away from discussing openly all these issues regularly as we do with all our partners.

Edited excerpts of the interview:

A year after the Russia-Ukraine war, how do you see the Indian position at the UN and other international fora evolve which has sought to balance between the West and Russia. Does the EU want the G-20 declaration to condemn Russia’s actions?

I think the Indian position has been made very clear by Prime Minister Modi himself: “this is not a time for war” and he is right.

I appreciated his statement, as well as the delivery of Indian humanitarian aid to Ukraine and the help offered to finalise the agreement for the export of Ukrainian grain – which has been blocked illegally by Russia – via the Black Sea. It is important to remember that this war goes beyond the borders of Europe, it has a global impact.

India is renowned as the largest democracy in the world and has a very influential voice on the world scene. The international community needs to come together and ensure that international law will prevail against Russia’s blatant violation of and disregard for the UN Charter. It is dangerous for the entire world if a permanent member of the UN Security Council violates in such a brutal way international law and rules. Such behaviour, if left unanswered, can only encourage others who decide to remodel the borders or the world with military means. Last week’s vote at the UN General Assembly made clear that 141 countries are calling for a just peace in line with the UN Charter. Only seven countries, among them Russia, voted against the Resolution.

There are facts one cannot deny. On 24 February 2022, Russian tanks rolled into the territory of its neighbour. Since then, Russia has been waging a full blown, illegal, unprovoked war against Ukraine. The publicly stated objective of this aggression is the destruction of Ukraine as a country and destruction of the Ukrainian nation. This cannot be accepted nor tolerated. Russia must cease its military aggression and withdraw all forces and equipment from the entire territory of Ukraine immediately and unconditionally.

This is an unprecedented situation internationally and this will inevitably also have an impact on proceedings at the G20. As in Bali, we will work for a G20 declaration that recognises the facts on the ground. Ukraine is a victim of an unprovoked, illegitimate, and brutal aggression, when whole chunks of its territory are being stolen away with brute force, children are being kidnapped and deported for forced adoption to Russia, sexual violence is used as a weapon of war, and hunger and winter are weaponised against the civilian population. This is what Russia does – and it affects everyone since the increased food and energy prices are a direct result of Putin’s war.

We trust the Indian Presidency and we will support its work towards an outcome that reflects the current extraordinary circumstances.

India has a huge dependence on Russia for defence needs and has gone ahead and bought oil in large quantities over the last one year. How can the European Union help in diversifying India’s defence requirements, especially since India needs defence technology and wants to manufacture them indigenously?

There is a global conversation ongoing concerning the security and resilience of supply chains, which has gained momentum after the COVID-19 pandemic.

The EU and India have recently set up a Trade and Technology Council, which will offer a structured platform also to discuss these matters.

In Europe we have learnt at our own expense how dangerous it is to depend too much on one supplier for energy that has not hesitated to weaponise the energy supplies when it suited his interests. The era of Russian fossil fuels is now over in Europe, it speeded up our green transition and diversification. Russia’s main offer remains fossil fuels. And because of Russia’s war of choice, its economy will be weakened, Russia will be strapped for cash and will eventually have to pay for the destruction inflicted on Ukraine. I leave it up to your judgement if this is a reliable partner.

It is for India to consider how it can best address its security needs. I hear that there is a major drive towards “indigenisation,” and I understand that a number of suppliers from Europe and elsewhere are building important partnerships also when it comes to the supply of defence equipment. These developments are certainly very positive and I know for a fact that many EU Member States are able and willing to contribute to this process. The EU has always been and will continue to be a reliable partner.

India and the EU have had conversations on human rights issues, including freedom of expression. How does the European Union see the situation arising out of the banning of the BBC documentary in India?

From an EU perspective, freedom of the press, and freedom of expression more broadly, is an essential feature of our open, democratic societies – in Europe as in India. We do not shy away from discussing openly all these issues regularly as we do with all our partners.

How does the EU view China, whose aggressive behaviour in the Indo-Pacific has caused concern. India has had an ongoing border standoff for almost three years now. How does the EU view these actions under Chinese President Xi Jinping’s watch, and has it provided India with any assistance to deal with the Chinese threat?

The EU developed an Indo-Pacific strategy in 2021. The aim is to contribute to regional stability, security, prosperity, and sustainable development at a time of rising challenges.

It is a positive agenda, not directed against anyone, underpinned by our belief in a rules-based system of world governance and a co-operative approach to international relations. This strategy is in fact very similar to India’s vision for the Indo-Pacific. I think that this shared starting proposition as well as a wide spectrum of converging interests open the way for EU-India cooperation in the region.

We can work together on a vast number of issues: trade, climate change, the digital transition, the pursuit of the Sustainable Development Goals, but also security and defence.

India is hosting the G-20 summit this year. What are EU’s priorities, which it would like India to include in the G-20 declaration?

India has set out a very ambitious programme for its Presidency, that we fully support. Several of the topics submitted for consideration to the Group are also long-standing EU priorities. For instance, the fight against climate change: we need to work together to ensure that we stick to the Paris agreement and limit global temperature rise to 1.5ÂșC. At COP 27 we reached an important agreement on loss and damage, which we need to implement in a way that is truly useful to the most vulnerable countries. But looking ahead, we need to double our efforts to make sure that COP28 delivers more than just a repetition of already existing ambitions.

There is a need for increased global action amongst the biggest emitters and staunch support to our partners in the green transition. But such a transition needs to be a just one. Because those least responsible for causing the problems are the ones that will be most affected by it. That is why the EU is the first global provider of public climate funds and development aid.

The digital transition is another priority of the Indian Presidency of great interest for the EU. We must ensure a “people-centric” transition, which fosters innovation while respecting individual rights and freedoms. More generally, the pursuit of the Sustainable Development Goals requires new momentum. But these are just some examples of the topics which are being discussed in the G20 and are of extreme importance for both the EU and India.
 

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