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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