“As this transaction shows, we are moving forward with urgency as we refresh our strategy and execute the decisions we have already made as part of that effort,” Fraser said in a separate statement.
She said the bank was “very pleased” with the economics of the transaction and plans to use the proceeds to invest in strategic priorities and continue to return capital to shareholders. It will continue to serve its 1,500 institutional clients in Australia.
Fraser in April unveiled plans to exit retail banking in 13 markets across Asia and the Europe, Middle East and Africa region. Instead, the bank planned to operate its consumer-banking franchise in both regions from four wealth centres in Singapore, Hong Kong, the United Arab Emirates and London.
Last month, she said the first round of bids for the consumer units was “competitive.” The process for the Australian business was the first to kick-off, with a host of local buyers expressing interest.
The deal agreed Monday would make National Australia one of the country’s leading credit card players, along with Commonwealth Bank of Australia. About 800 Citigroup employees as well as senior staff are expected to join the Melbourne-based lender, which is taking on a home lending portfolio, unsecured lending business, retail deposits and private wealth management operations as part of the deal.
The transaction is likely to attract serious scrutiny from the nation’s antitrust regulator, who had already warned the big banks that any deal would be examined carefully.
The pact comes about a week after National Australia said it intends to buy back up to A$2.5 billion of its own shares.
National Australia Chief Executive Officer Ross McEwan said robust competition in the credit card business, from traditional banks as well as new players offering buy-now-pay-later services, would help his bank’s case that the deal won’t substantially change the dynamics of the market.
“We believe we have got a very strong case for getting this through, otherwise we wouldn’t be putting this forward and nor would Citi,” he told reporters on a conference call Monday.
