The National Australia Bank Ltd (ASX: NAB) share price is pushing higher on Wednesday morning.
At the time of writing, the banking giant's shares are up 1% to $31.58.
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Why is the NAB share price rising?
The NAB share price is rising this morning after the bank provided an update on a major acquisition.
According to the release, NAB has completed the $1.2 billion acquisition of Citigroup's Australian consumer business.
This acquisition includes a home lending portfolio, unsecured lending business (operating under the Citigroup brand as well as white label partner brands), retail deposits business, and private wealth management business. Approximately 800 employees, including senior management, will join NAB as part of the deal.
These businesses generated pro forma net profit after tax of $145 million for the 12 months to June 2021. This implies an 8x earnings acquisition multiple for Citigroup's Australian consumer business.
Management commentary
NAB's Chief Executive Officer, Ross McEwan, appeared pleased to complete the acquisition. He said:
The acquisition of the Citigroup Consumer Business supports our ambition to build a leading personal bank. We have good momentum in our Personal Banking division, driven by our aim to be simpler and more digital for customers and colleagues.
Mr McEwan expects the acquisition to support its digital banking goals. He explained:
The purchase of the Citigroup Consumer Business gives us greater scale in unsecured lending and supports investment in new technology. This will enable us to create more innovative, simple and digital products and services for customers, particularly in unsecured lending and supporting business partners with white label products.
We welcome our new colleagues to NAB. They bring deep banking expertise and insights into how customers' needs continue to change.
