Axis Bank-Citi Merger: The employees of Citibank who will choose to join Axis Bank will keep enjoying the same pay structures as present, a report quoting sources said on Friday. Some other employees were also given the option to apply for roles in such verticals of Citi that were not being merged with Axis Bank, the sources added.
For employees who do not find the fresh job offers not suitable, two to three months will be provided to find another job, the sources quoted by LiveMint said on condition of anonymity. After announcing the merger last week, Axis had said that it will give Citi employees the same or higher amounts of remuneration post merger.
“Axis will make fresh offers to all the 3,600 employees. While there can be restructuring in bonus, variable pay structure, it will not be a dramatic shift,” LiveMint said quoting one of the two sources.
On March 30, private lender Axis Bank said it had agreed to acquire Citi India’s retail assets for $1.6 billion. Axis Bank CEO and MD Amitabh Chaudhry had said there will be no milestone payments in deal, and a cash deal of Rs 12,325 crore will be payable only once entire business gets transferred from Citi Bank. Axis will also pay another Rs 1,200 crore to aid the transaction.
While high-spending credit card customers is one of the most lucrative parts of the deal for Axis Bank, relationship managers in Citi’s wealth management team is also another cherry on the cake, the sources told the media organisation. As per them, Citi India had given permission to the employees of the consumer business portion two months ago whereby they could apply for internal postings to stay in the company.
“Relationship managers, about 10 per cent of the Citi team moving to Axis, will be the most sought-after. The managers bring with them clients that will be important to Axis and while all would not be high net-worth individuals (HNIs), they will be important nonetheless,” said the first source cited by LiveMint.
“The addition of experienced wealth managers from Citi would give an impetus to Axis Bank’s premium banking programme Burgundy,” LiveMint said in its report.
The transaction between Axis Bank and Citi India will include approximately 3,600 Citi employees supporting the consumer businesses in India, who will transfer to Axis upon completion of the proposed transaction. The agreement between Axis and Citi focuses on employee retention and protecting their salaries, and Citi has tried to make sure to follow this pattern, the first source said.
However, Axis’s move to increase remunerations might not be received warmly by some of the Indian lender’s present employees. “Like any merger, there could be human resources integration issues because of the difference in culture and pay packages. Some of the Citi employees get paid 20-25 per cent more than their counterparts in Axis and that could lead to some friction,” said the second source, adding that overlaps in support functions may result in some involuntary exits.
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