NAB will acquire Citigroup’s consumer business with $12.2 billion in loans and $9 billion in deposits for $1.2 billion including a cash premium of $250 million.
Ross McEwan, CEO of the Melbourne-headquartered NAB, said Citi’s credit card business and the data it held was especially attractive for the bank however it would not be acquiring the vendor’s underlying technology.
“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 transaction is being conducted on a multiple of eight times earnings. NAB expects around 800 of Citi’s employees to come across after completing the transaction.
The $12.2 billion loan book consists of $7.9 billion in mortgages and $4.3 billion in unsecured lending with the majority held on credit cards. NAB holds around $267.7 billion in mortgages according to data from the prudential regulator to June.