National Australia Bank announced on Monday that it has decided to acquire Citigroup’s Australian consumer business in a deal worth A$1.2 billion ($882.24 million). This deal includes a premium of A$250 million and will not include the purchase of Citi’s current tech systems or platforms.
This deal has been concluded in an attempt to increase National Australia Bank’s market share and elevate its status as a leading lender among the “Big Four” banks that control over 80% of the Australian market.
NAB Chief Executive Officer Ross McEwan had the following to say regarding the acquisition: “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.”
With the deal expected to be sealed by March 2022, NAB is expected to pay a total of A$375 million in terms of acquisition and integration costs. The bank is also expected to spend A$165 million in fiscal 2022 and 2023 in an effort to construct a new lending platform for the combined business.
The deal follows Citigroup’s decision to exit its 13 overseas consumer operations as CEO Jane Fraser looks to boost the company’s profitability.
