Australia's NAB to Buy Citi's Local Consumer Business in $882 Million Deal

National Australia Bank will buy Citigroup's local consumer unit for about $882.24 million, the companies said Monday, as the American bank exits the region while buy-now, pay-later rivals challenge the old credit card business model, Reuters reported. The deal consolidates more than 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. "The proposed acquisition ... brings scale and deep expertise in unsecured lending, particularly credit cards, which continue to be an important way for customers to make payments," said NAB Chief Executive Officer Ross McEwan. "Access to a greater share of payments and transaction data will help drive product and service innovation across our personal banking business." Credit card payments in Australia have been shrinking as government pandemic cheques have been used to pay down debt and younger generations turn to buy now pay later providers such as Afterpay to pay in 'interest-free' installments. The deal, which needs to be approved by the competition regulator, includes a A$4.3 billion unsecured lending portfolio, A$7.9 billion in residential mortgages, about A$9 billion in deposits and 800 Citi employees. 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. Read more.