NAB could be in the frame to buy Citibank’s Australian business

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    When NAB’s CEO fronted the parliamentary committee last Friday, he had plenty to say about home prices, but when it came to potential acquisitions, Ross McEwan refused to rule out a Citi takeover – or comment further on the potential of another purchase by the big bank.

    "Our strategy today is to grow through our own activities, but you know, every business, be it a bank or anybody else would look at areas that might add to the customer services and make it more efficient," he said.

    Mortgage lending is already highly concentrated in the big four banks, and NAB’s recent $220 million acquisition of Neobank 86 400 hasn’t done anything to help perception that the big four have too much of a grip on the market. So while McEwan’s posture at the committee hearing was a clear message that he would do what he thought was best for shareholders, in reality Australia’s third-largest lender might well think twice before buying Citibank’s $6.6 billion housing loan book.

    And it may be Citibank’s credit card business that poses the greatest danger of regulatory interference.

    "Given the five main credit card providers are the big four plus Citigroup, there would certainly be competition concerns if one of the big four wanted to buy this Citigroup business," said ACCC chairman Rod Simms on Friday. "It's something we're going to take an extremely close interest in."

    Sims was explicit enough to say that if NAB, or any of the other Big Four tried to purchase Citi’s business then the ACCC would investigate, and could well block the deal.

    "If we take a very close look at something through a public review, then taking a decision to oppose a merger is always an option" he told the ABC.

    Citibank by the figures

    5th biggest player in Australian credit card market with around 12.6%

    $6.6 billion in housing loans

    36 years in Australia

    1200 employees nationally

    Timeline in Australia

    1985 – first foreign bank to be granted a banking license

    1999 – buys Diners Club Australia

    2001 – Citibank Centre opens in Sydney

    2002 – launches CitiGold Wealth Management

    2009 – following the GFC, Citi splits into Citi Holdings (troubled assets, brokerage, consumer finance) and Citicorp (retail banking, credit cards, business banking)

    2019 – appoints Marc Luet CEO

    Top 10 mortgage lenders in Australia by market share

    CBA 25.7

    Westpac 23

    NAB 14.7

    ANZ 14.3

    ING 2.9

    Macquarie 2.9

    Bendigo 2.6

    Suncorp 2.4

    BoQ 1.6

    HSBC 1.23

    Citibank’s home lending business has slipped over the last year and is now the 21st biggest in the nation.

    Original Article