The National Australia Bank Ltd (ASX: NAB) share price is tracking well today amid reports it’s looking to throw its hat into the ring to purchase Citigroup Inc‘s banking business circle.
At the time of writing, the NAB share price is trading at $26.24, 0.61% higher than its previous close.
Let’s take a look at what we know about NAB’s possible purchase of Citi’s banking business.
Is NAB set to buy Citi’s retail bank?
Citi announced its exiting consumer banking in 13 markets, including Australia, in April. Since then, rumours that the Dutch banking group ING is eyeing off the business have been swirling.
However, yesterday a report in The Australian claimed NAB was challenging ING for Citi’s Australia and New Zealand operations.
Citi is reportedly asking $2 billion for its consumer banking business.
According to the publication, Citi’s banking business could be attractive to NAB as it draws a lower portion of its earnings from mortgages than do Australia’s other big four banks.
When questioned at a parliamentary hearing in April, NAB CEO Ross McEwan didn’t rule out purchasing Citi’s banking business. He said:
Our strategy today is to grow through our own activities, but every business, be it a bank or anybody else, will look at areas that may add to the customer service and make it more efficient, which helps customers longer term with pricing.
If NAB is contemplating purchasing Citi’s banking business, it may be rattled by previous concerns raised by the Australian Competition and Consumer Commission (ACCC).
In April, ABC News reported that the watchdog’s chair, Rod Sims, said the ACCC might block the sale if it involved one of the big four. Sims was quoted as saying:
Given the five main credit card providers [in Australia] are the big four plus Citigroup, there would certainly be competition concerns if one of the big four wanted to buy this Citigroup business.
NAB share price snapshot
The NAB share price has been performing well lately, gaining 14% year to date.
It has also lifted 44% since this time last year.