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videos | Mar 31, 2022 10:25 AM IST

Axis Bank's margin may increase 20 bps with Citi deal: JM Financial

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Citibank has sold its retail business in India to Axis Bank for $1.6 billion. Axis Bank is expecting the necessary approvals in the next 9-12 months.

Axis Bank's acquisition of Citi's retail business in India could lead to an increase of 20 basis points (bps) in the former's margins and 7 to 10 basis points in Return on Assets (ROA), said Sameer Bhise, Banking Research Analyst at JM Financial Institutional Securities.

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One basis point is one-hundredth of one percentage point
Citibank has sold its retail business in India to Axis Bank for $1.6 billion. Axis Bank is expecting the necessary approvals in the next 9-12 months.
“In terms of numbers, we are seeing that this could potentially add around 20 basis points to margins and around 7 to 10 basis points to Axis Bank ROA as we see today, obviously efficiencies will take some time to kick in," said Bhise in an interview with CNBC-TV18.
Axis Bank has said cards balance sheet will grow over 55 percent after the acquisition. However, concerns remain over customer acquisition for the lender.
“I think it is a very good asset, as we see it today. It is a very strong retail franchise," added Bhise.
For full interview, watch accompanying video
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