Lessons on bank M&A from NAB's tricky $1.2b Citi integration
Bank M&A, a notorious destroyer of shareholder value, is again in focus due to the ANZ-Suncorp transaction. So how has the last big deal in the sector panned out?
Last weekend, National Australia Bank turned off the transaction and mortgage accounts of Citi customers it acquired via the August 2021 acquisition of Citi’s Australian consumer business for $1.2 billion.
It was a major milestone in an integration process NAB said would take “2-3 years” from the completion of the deal in July 2022. Still to come is the transition of credit card accounts which awaits the development of a new platform to manage both Citi and NAB accounts.
Bank M&A is a notorious destroyer of shareholder value and again a focus in Australia as ANZ moves ahead with buying Suncorp Group’s banking assets, having overcome a major regulatory hurdle. NAB's Citi deal was the last big one in the sector, and according to the company at least, is faring pretty well.
In the deal, NAB acquired around 500,000 customers and targeted synergies of around $130 million a year over three years with integration costs of $375 million, according to its 2022 interim result. The deal added $3.95 billion in unsecured lending (including credit cards), $8.8 billion in mortgages and $9.4 billion in deposits.
