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.
ACCC’s concerns
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.
The post NAB (ASX:NAB) share price lifts amid news of bid to acquire Citi banking appeared first on The Motley Fool Australia.
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More reading
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- ASX 200 Weekly Wrap: COVID wobbles ASX as shares retreat
- It has been a big past year for the National Australia Bank (ASX:NAB) share price
- Is now a good time now to buy National Australia Bank (ASX:NAB) shares?
- NAB (ASX:NAB) share price up following prediction of no rate hike until 2024
Motley Fool contributor Brooke Cooper has no position in any of the stocks mentioned. Citigroup is an advertising partner of The Ascent, a Motley Fool company. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.
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