National Australia Bank (NAB) has agreed to purchase the Australian consumer business of Citigroup in a deal valued at $880m (A$1.2bn).

The deal, which is structured primarily as an asset and liability transfer, will require NAB to pay in cash for the net assets of the Citigroup consumer business and along with a premium of A$250m.

The proposed deal covers a home lending portfolio, unsecured lending business, retail deposits business, as well as private wealth management operations.

As of 30 June 2021, Citigroup’s consumer business has lending assets of approximately A$12.2bn and deposits of approximately A$9bn.

Additionally, senior management and approximately 800 Citigroup employees are expected to join NAB once the deal closes, which is subject to regulatory approval.

The technology systems or platforms that currently service these portfolios and Citigroup’s institutional business in Australia are not part of the deal.

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By GlobalData

NAB CEO Ross McEwan said: “The cards and payments sector is rapidly evolving and access to a greater share of payments and transaction data will help drive product and service innovation across our Personal Banking business and deliver market-leading customer experiences.

“Citigroup’s management team has also built strong white label partnerships with household names in the airline, retail and financial services sectors over many years. This expertise, together with our commitment to deliver market-leading products and services, provides an opportunity to grow with existing partners and add new partners.”

Citigroup will continue to operate its consumer banking businesses until the deal closed, which is expected to happen by March 2022.

Last month, NAB announced that it will invest $74.3m in the branch transformation programme in 2021.