In April 2021, Citibank announced that it would be exiting the retail businesses, including credit cards, retail banking, consumer loans and many other such lines of business in 15 geographies in Asia and Europe, including India. Their rationale was that the business did not gain scale in these geographies, so they wanted to refrain from committing more resources to these markets. In March 2022, they announced that the Indian retail business would be carved out and sold to Axis Bank for USD 1.6 Billion. The date was said to be set as the first half of 2023.

Citibank is close to delivering the goods to Axis Bank.

For most of the second half of 2022, Citibank inundated me, and perhaps most of their customers, to get them to consent to transfer their relationships to Axis Bank. They spammed me day in and day out for me to say YES. Not a good impression to show that they were desperate.

When they could not convince customers to say YES to moving their relationships, Citi changed tactics and wrested a YES out of them. They said that if you use your card, it’s consent. If you redeem your rewards, it’s consent. And so on.

And this worked, given me and a lot of other folks got these messages over the past few weeks, despite not having expressly clicked a link to say Yes.

To keep the band of customers together, Citi has also hiked marketing spending and discounts over the past few months, as everyone would have noticed. They’ve even been paying influencers to get the message out about their discounts.

After all, the eventual deal size of what Axis Bank pays Citi for would depend on the number of accounts delivered on the closing date. So, the overbearing enthusiasm from their end now. I wish this enthusiasm existed over the years, and they did not have a small book to show for their years in India in the first place.

Citi has started closing accounts in preparation for a move to Axis Bank.

For those who chose not to be heading to Axis Bank, Citi has now started closing their bank accounts. For instance, Social Media is currently full of complaints from customers whose accounts with Citi have vanished overnight.

Just came back from citi bank MG road , bangalore office. you ppl have closed close to 5k account without any notification. it is really shameless behav from a prestigious bank.

— Amaresh Dhal (@tweet_amaresh) February 9, 2023

Thanks @NewsMinuteNow for listening me. @Citi and @AxisBank for listening how bank accounts are close on the fly yesterday as per citi staff on citi phone, account was supposed to be closed on 15 Feb or 15 March 2023

— Srinivasan G/சீனு (@gsvasan) February 9, 2023

In fairness, Citi had sent out emails to customers about a pending closure of their accounts in the past month or so.

Citi has stopped renewing the insurance for Prestige Customers.

This one gave me chuckles. Citi did not renew its group travel insurance, which is a part of the benefit from Citi for all Prestige Customers for their international travel, and blamed it on administrative challenges. I don’t think, though, in my small number of years running M&A in financial services and banking, did I ever refer to the sale of assets as “administrative challenges.”

When asked if they are rebating the fee for withdrawing a key product feature or replacing it with something else of an equivalent nature, Citi said no and no.

Bottomline

Citibank is nearing the finish line in terms of putting a bow on its assets in India and handing them over to Axis Bank. In exchange, they will be paid over a billion dollars. However, I don’t like how they’ve gone about the whole exercise, which largely reeks of desperation from Citi’s end to get this done with and tarnish the reputation they built in India over the years (only talking credit cards here, not banking!). And hence, I already moved my spending from Citi to Axis Bank in anticipation.

It will likely be a few more days before we get a morning email saying we are customers of Axis Bank, so why not already start benefiting their P & L. I anticipate the deal to be closed before the end of this financial year (March 31, 2023).

What are your thoughts on Citi’s handling of their retail banking business sale to Axis Bank?

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