National Australia Bank to Buy Citi's Local Credit Card Business in $882 Million Deal

Fazzaco learned that National Australia Bank will buy Citigroup's local consumer unit for about $882.24 million. The deal comes after U.S. lending giant Citi in April said it would exit its 13 overseas consumer operations.

The deal consolidates 90% of the country's credit cards industry into the hands of Australia's Big Four banks, with NAB adding a million customers through the deal to become the nation's second-largest credit card provider. "Access to a greater share of payments and transaction data will help drive product and service innovation across our personal banking business." said NAB Chief Executive Officer Ross McEwan.

NAB said the deal would require equity of about A$1.2 billion, as it would pay cash for the net assets of Citi's book plus a A$250 million premium. In addition, NAB will spend A$165 million in building an unsecured lending platform that will replace "old" systems, and in which Citi's unsecured loans will be integrated with its own. Citi's institutional business and underlying technology or platforms are not part of the deal, which is expected to close by March 2022, subject to the regulatory approvals.

The Australian Competition and Consumer Commission (ACCC) said it would look "extremely closely" at "any further consolidation involving large players in the banking sector".