NAB has announced that it is to buy out the Australian consumer business of Citigroup, including over $12 billion in loans and $9 billion in retail deposits.
NAB will pay a sweetener of $250 million cash to Citigroup to wrest control of their home loans, consumer banking and private wealth management arms. 800 current Citigroup employees will transfer to NAB along with the sale.
The $1.2bn deal had been rumoured for several weeks and has now come to fruition. NAB’s share price has risen steadily since mid-June, when news of a potential move hit markets.
CEO of NAB, Ross McEwan, said that the Big Four bank had purchased Citigroup in part to advance its credit card portfolio and assist in the personal banking space.
“The proposed acquisition of the Citigroup Consumer Business brings scale and deep expertise in unsecured lending, particularly credit cards, which continue to be an important way for customers to make payments and manage their cashflows,” he said.
“The cards and payments sector is rapidly evolving and access to a greater share of payments and transaction data will help drive product and service innovation across our Personal banking business and deliver market leading customer experiences.”
The ACCC has already said that it would need to sign off on any potential sale, as it did with NAB’s purchase of 86 400.
ACCC chair Rod Sims said that the potential credit card ramifications of NAB purchasing Citibank would require ACCC oversight.
“We don’t know the status of it, but if it was to go ahead we’d have an extremely close look at it,” he told the SMH when the sale was first rumoured. “Obviously you’ve got the four big banks - we think the competition between them is fairly muted, and therefore competition from other players is important.”
“Citi is an important player, particularly in cards, so this is something we’d have a very, very close look at.”