Assets Under Management AUM

Axis will not change salary structures for staff joining Citi

Bombay : Citibank staff who choose to join Axis Bank will benefit from compensation structures similar to what they currently have, while some have had the opportunity to apply for positions in Citi verticals that are not sold, have said two people familiar with the plans.

Employees who do not find the new offers acceptable will have two to three months to find another job, the people said on condition of anonymity. Axis had said last week that it would pay Citi employees compensation equal to or greater than their current compensation.

“Axis will make new offers to all 3,600 employees. Although there may be a restructuring of the structure of bonuses and variable compensation, it will not be a radical change,” said one of the two people.

On March 30, Axis Bank announced that it had agreed to purchase Citibank’s consumer business in India for 12,325 crore ($1.6 billion) in cash, in addition to paying another 1,200 crores to Citi to ease the transition. By protecting the salaries and pay structures of Citi staff, Axis Bank is trying to ensure that most of them move to Axis once the merger is complete.

In addition to spendthrift credit card customers, relationship managers on Citi’s wealth management team are another lucrative aspect of the deal for Axis Bank, the people quoted above said. According to these people, Citi a few months ago allowed employees in the consumer branch to apply for internal positions to stay in the organization.

“Relationship managers, about 10% of the Citi team moving to Axis, will be the most sought after. Managers bring with them customers who will be important to Axis and while not all of them will be high net worth individuals (HNIs), they will nonetheless be important,” the first person quoted above said.

The addition of experienced wealth managers from Citi would boost Axis Bank Bourgogne’s premium banking program.

ICICI Securities analysts said Axis Bank will be able to leverage the Burgundy platform to serve over 40,000 affluent customers and over 100 ultra-HNI families. “This will further strengthen Axis Bank’s franchise with a 42% addition to Burgundy’s total assets under management (AUM), making it the third-largest wealth manager by combined AUM,” the company said. brokerage in a March 31 note.

The deal between Axis and Citi involves protecting employee wages, and Citi has tried to ensure the same across all consumer businesses it sells, the person quoted above added.

However, Axis Bank’s attempt to retain Citibank employees at a relatively higher salary may not go down well with the national lender’s employees.

“Like any merger, there may be human resources integration issues due to the difference in culture and compensation. Some Citi employees are paid 20-25% more than their counterparts at Axis and this could lead to friction,” the second person said, adding that there could be involuntary departures due to overlapping job functions. support.

In April last year, Citigroup announced it would exit consumer businesses in 13 countries, including India, as it focused on four wealth centers in Singapore, Hong Kong, the United Arab Emirates and London. The deal with Axis Bank is the eighth sale announced by Citi in the Asia-Pacific region since then.

Emails sent to Citibank and Axis Bank went unanswered.

To subscribe to Mint Bulletins

* Enter a valid email

* Thank you for subscribing to our newsletter.

Download the app to get 14 days of unlimited access to Mint Premium absolutely free!