citi: Did Axis overpay in Citi deal? Analysts suppose so

Throughout the identical interval, Axis Financial institution’s market share has elevated to 9.3% from 8.3%, in line with Reserve Financial institution of India knowledge.

“We stay involved concerning the regular decline in spends market share for Citibank over the previous 12 months as this has implications for Axis Financial institution in our view,” mentioned Suresh Ganapathy, affiliate director, Macquarie Capital.

In March, Axis Financial institution mentioned it had acquired Citi’s India retail enterprise, comprising largely its bank cards portfolio, mortgages and different retail segments, totalling about ₹27,400 crore. The lender can even purchase Citi’s deposits of ₹50,200 crore.

Whereas Axis Financial institution pays ₹12,300 crore straight as the worth of companies, the capital funding of ₹3,500 crore and integration value of ₹1,500 crore provides as much as a complete of ₹17,300 crore ($2.3 billion).

Citi’s bank card enterprise has seen a steady decline in spend market share to 4% from 10% over the previous 4 years, together with a decline in spend-per-card to ₹4,000 from practically ₹16,000. In June, the month-to-month spends per card declined additional for Citi, with a comparatively low-ticket measurement of ₹3,400 per card.

The overall card-in-force for the US lender declined to 2.56 million in June from 2.6 million a yr in the past. Throughout the identical interval, Axis Financial institution’s whole bank cards elevated to 9.7 million from 7.13 million.

“The Citi efficiency is trending in step with the assumptions we had made on the time of funding,” Axis Financial institution’s chief monetary officer Puneet Sharma had advised analysts not too long ago. “After the CCI (Competitors Fee of India) approval, we can have higher readability on knowledge.”

On an business stage, the overall variety of excellent bank cards within the system grew 25.3% year-on-year to 78.7 million in June, the best previously 30 months.

Round 1.85 million new bank cards have been added to the system in June, led by

, which added practically 386,000 bank cards.