The National Bank of Australia (NAB) is purchasing Citigroup’s local consumer unit for roughly $882 million as credit card use shrinks in that country.
As Reuters reported Monday (Aug. 9), the deal puts more than 90 percent of Australia’s credit card industry under the care of the country’s four biggest banks. NAB will gain a million customers in the deal and become Australia’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,” he said.
As Reuters notes, credit card payments have declined in Australia as pandemic-related stimulus payments have been used to pay down debt, and younger consumers have embraced buy now, pay later (BNPL) services from companies like Afterpay.
Earlier this month, FinTech giant Square announced plans to purchase Afterpay in a $29 billion all-stock deal.
“Square and Afterpay have a shared purpose,” Square Co-Founder and CEO Jack Dorsey said in a news release.
“We built our business to make the financial system more fair, accessible and inclusive, and Afterpay has built a trusted brand aligned with those principles,” he said. “Together, we can better connect our Cash App and Seller ecosystems to deliver even more compelling products and services for merchants and consumers, putting the power back in their hands.”
The NAB/Citi deal, which still needs the blessing of Australia’s competition regulator, includes a $4.3 billion unsecured lending portfolio, $7.9 billion in residential mortgages, about $9 billion in deposits and 800 Citi employees (all figures in Australian dollars).
The deal comes just days after Citi Australia jumped into the BNPL arena with a new product called Spot, due to be rolled out in October.
The card can be used in stores or online anywhere Mastercard is accepted and allows users to divide payments into four interest-free installments.
Read more: BNPL Takes Its Next Dramatic Turn As Square Buys Afterpay For $29B
Citi Australia Launches BNPL Tool Spot
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