The Indian banking space has been going through consolidation in the last five years, with an increasing number of mergers and acquisitions. The acquisition of the consumer business of Citibank by Axis Bank is the most recent one. The acquisition will result in further consolidation in the consumer banking space, especially the credit and charge cards market, says GlobalData, a leading data and analytics company.

The credit and charge card market in India is dominated by the top four players, including HDFC Bank, ICICI Bank, State Bank of India (SBI), and Axis Bank, collectively occupying over two-thirds market share in terms of cards in circulation. Axis Bank held a 12.2% share in March 2022, which increased to 14.4% post-acquisition of Citibank by March 2023.

Axis Bank’s acquisition of Citibank India’s consumer businesses in India in March 2023 comprised its retail banking business such as Citi accounts, loans, and credit cards, as well as its wealth management business. The deal also includes the acquisition of the consumer business of Citi’s non-banking financial company, Citicorp Finance (India). The integration process is expected to be undertaken over the next 18 months.

Ravi Sharma, Lead Banking and Payments Analyst at GlobalData, comments: “The acquisition complements Axis Bank’s credit card business, which is expected to witness around 20% rise in customer base, thereby further strengthening its position in the market.”

Indian credit card sector on growth trajectory

The credit and charge card market in India, which was adversely affected by the pandemic, is now back on a growth trajectory, supported by economic growth, a rise in consumer spending, growing digital literacy among consumers, and the government’s digital push. According to GlobalData’s Payment Cards Analytics, total credit and charge card payments value in India is expected to register a compound annual growth rate (CAGR) of 23.9% to reach INR32.5 trillion ($392.4 billion) in 2026.

Sharma concludes: “The acquisition provides Axis Bank access to Citibank’s large premium and affluent customer base, which aligns well with the bank’s overall strategy to strengthen its position in the premium segment of the market.”

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By GlobalData