National Australia Bank Limited (NAB) has agreed to acquire the Australian consumer business of Citigroup for AUD 1.2 billion ($880 million).

Citi’s Australian consumer bank business includes residential mortgages of AUD 7.9 billion, deposits of AUD 9 billion, and unsecured lending of AUD 4.3 billion, which will be transferred to National Australia Bank along with nearly 800 employees at the closing of the deal.

Jane Fraser — Citigroup CEO said: “This is a positive outcome for our clients, our colleagues and for 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.

“We are focusing our resources on businesses where we have scale and competitive advantages in order to deliver growth and improved returns over time.

“In addition to serving our Wealth clients through four global hubs, we will continue to serve our institutional clients in Australia, as we have for nearly a century, and across the greater Asia Pacific region.

“We are very pleased with the economics of the transaction and we will use the capital generated to invest in our strategic priorities, as well as to continue to return capital to our shareholders.”

Citigroup’s consumer business services in Australia include credit cards, retail banking, loans, mortgages, and wealth management solutions for high net worth individuals.

The business is also a credit card provider for certain Australian brands such as Coles, BOQ, PayPal, Kogan, Suncorp, Qantas, and Virgin Money.

Citigroup’s Australian institutional business has been excluded from the deal. The institutional business offers a variety of investment and banking services to nearly 1,500 corporates, governments, banks, and institutional investors in Australia along with offshore clients.

National Australia Bank was chosen as the buyer of the consumer business following an auction process.

Ross McEwan — CEO of National Australia Bank said: “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.

“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 deal, which is subject to regulatory approvals, is expected to close by March 2022.

  Australia, Banking acquisition news, Banking industry news, Citigroup, Jane Fraser, National Australia Bank, Ross McEwan