Citigroup sells its Australian consumer business to NAB
Citigroup has announced that it has sold its Australian consumer banking business to National Australia Bank for a deal worth $882 million as it continues its policy of getting rid of underperforming business units around Asia and parts of Europe.
Citigroup retains the wealth management business in Australia and has sold only its consumer banking business to NAB which means that loans worth A$12.2 billion and deposits worth A$9 billion would be transferred to the NAB and the 800 employees of Citigroup that are working currently would also be transferred to NAB.
“This is a positive outcome for our clients, our colleagues, and Citi. As this transaction shows, we are moving forward with urgency as we refresh our strategy and execute the decisions we have already made as part of that effort,” said Fraser, the new CEO of Citigroup. “We are focusing our resources on businesses where we have the scale and competitive advantages to deliver growth and improved returns over time,” she added.
The sale follows the overall decision of Citigroup to focus on regions and businesses that provide the most returns for the company and as a result of this decision, the bank had decided to sell its assets in 13 locations across Asia and parts of Europe to not only generate funds but also give up on low impact regions and focus on regions where it has some very good business.
For NAB, it is indeed a boost as it gets to grow its user base in personal banking and consumer lending in a large manner in one big swipe. The deal does make sense for NAB as it looks to grow all around Australia and it had beat off some big competition for this deal. Though several new players are entering into the banking and financial services business, especially on the BNPL side, it is expected that the legacy businesses would continue to provide stable returns in the future, as well as the bank, continues to work on new products and features to fend off competition in this sector for the long term. Likely, the bank would immediately start focussing on the BNPL business as that sector has really taken off over the last few months and seeing increasing competition with new entrants including giants like Paypal