Why Citibank is losing sleep over the deal with Axis Bank

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Editor's note: On 30 March this year, when Citibank India announced the sale of its retail business to Axis Bank, the deal clocked in at $1.6 billion—almost 60% more than the street estimate of $1 billion. The announcement brought the curtains down on a year-long process of trying to sell the global banking giant’s retail business in the country, a process that was micromanaged by the bank’s headquarters in New York. By all accounts, having got themselves a good deal, Citibank executives should now be sitting pretty, waiting for completion of the transfer of assets. That would have been the case too, had the deal not had so many caveats. The result: Citibank’s retail banking executives are now racing against time to see that the deal goes through in its current shape and form—which increasingly seems like a difficult proposition. “The clawback clauses associated with the Citi-Axis deal are very severe. It seems unlikely, with the current trend, that the deal will close at $1.6 billion,” says a senior Citibank executive, asking not to be named. The Morning Context was the first …