Confident of delivering value on bid for Citi India deal: Axis Bank's Moghe

India's third-largest private lending is purchasing the retail business in a transaction worth Rs 12,235 crore

Axis Bank is confident of delivering value for the price it is paying for Citi’s retail business in India, said Sanjeev Moghe, president & head--cards & payments at the private lender, on Wednesday.

Moghe was replying to a question about recent media reports that the invocation of a ‘clawback’ clause in the deal and a potential reduction in the total payment which Citi would receive because of shrinking customer bases and revenues.

“We are very confident of what we have done diligence on, the price that we have bid on.... I think those parameters don’t change,” Moghe told reporters.

Axis, in March 2022, said it would purchase Citi’s retail business in a transaction worth Rs 12,235 crore. Moghe said the bank was confident the integration would happen “smoothly” over 18 to 24 months.

Moghe was speaking at an event announcing a collaboration between Axis Bank and Eazydiner. The tie-up offers the 3 crore card customers of Axis Bank discounts of up to 40 per cent on certain credit cards and heavy discounts on birthdays in more than 10,000 restaurants.

Moghe did not express discomfort with the fact that Citi’s portfolio had experienced de-growth for some time.

“Their (Citi) spend is a very important indicator of what is happening and the overall spends are growing and therefore, those metrics look ok. The fact that the portfolio size is de-growing, that is fine,” he said, adding that Axis Bank was not yet reaching out to Citi’s customers.

Moghe said that the non-performing asset (NPA) ratios for both Axis Bank and Citi were under control. “Normally, you run cards business with a 4-5% of NPA. Right now it is substantially lower. We do not disclose that number. This number is for the industry and I know our number is well under control,” he said.

Moghe also said that the Reserve Bank of India’s recent move towards preventing non-bank prepaid payment instruments being loaded through credit lines would not affect Axis.

Axis Bank has 'buy now pay later' offerings in tie-ups with merchants and those will continue, he said.

Talking about the collaboration with Eazydiner, Moghe said that the total contribution of dining on card expenditures would remain in the range of 3-5 per cent. Such partnerships, however, improve customers’ experience with Axis Bank cards, the executive said.