NAB Agrees to Buy Citigroup's Australian Consumer Business
August 09 2021 - 1:08AM
Dow Jones News
By Alice Uribe
SYDNEY--National Australia Bank Ltd. has agreed to buy
Citigroup's Australian consumer business, paying cash for the price
of its net assets plus a 250 million Australian dollar (US$183.84
million) premium.
The Australian lender's Chief Executive Ross McEwan said the
proposed acquisition supports NAB's growth ambitions for its
personal banking business.
"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," he said. "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 proposed acquisition will be fully funded by NAB's existing
balance sheet resources, the lender said. It includes a
home-lending portfolio as well as the areas of unsecured lending,
retail deposits and private wealth management.
Citigroup consumer business had lending assets of around $12.2
billion and deposits of around $9.0 billion at the end of June.
As part of the proposed acquisition, senior management and
around 800 Citigroup employees in total are expected to join NAB.
It is expected to be marginally accretive to cash earnings and cash
return on equity from completion, NAB said.
"Pretax cost synergies of approximately A$130 million per annum
are expected to be realized over three years, with the majority
achieved in the first two years," it said.
Subject to approvals, completion is expected to occur by March
2022.
Write to Alice Uribe at alice.uribe@wsj.com
(END) Dow Jones Newswires
August 09, 2021 00:58 ET (04:58 GMT)
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