Most brokerages are bullish on Axis Bank Ltd after the private lender completed a deal to buy Citigroup's local consumer and non-banking finance businesses. Axis Bank's shares were trading 1. 75 per cent lower at ₹ 850. 10 apiece on the BSE in Thursday's intra-day trade. The stock rose 2. 5 per cent on Wednesday. They have risen about 15 per cent since the deal was announced in 2022. TRENDING STORIES See All Premium ICICI Bank launches digital solutions for participants . . . Premium Most Expensive cars Premium Passpass Pulse candy launches new out-of-home campaign Premium Two Australian universities to open campuses in Gujarat . . . The deal was closed at a slightly lower sum of ₹ 11,603 crore due to Citi's customer attrition and a fall in deposit base, Subrat Mohanty, Axis Bank 's group executive of banking operations and transformation, said at a briefing yesterday. The deal, when announced in March last year, was worth ₹ 12,325 crore. The acquisition is expected to to hurt the January-March quarter earnings. However, if executed well, the long-term gains outweigh this pain, brokerages believe. Here's what brokerages say about Axis Bank's purchase of Citi's India retail business : Emkay Global - The overall acquired deposits base has meaningfully reduced by 21 per cent to ₹ 399 billion (77 per cent being CASA) as at end Feb-23 from Rs502 billion in Mar-22, mainly due to Citi customers choosing not to port to Axis Bank. The management believes that this could be due to some customers consolidating their banking relationship, while some have moved to other banks. MINT PREMIUM See All Premium Why Donald Trump is popular in Africa Premium Are you ready for India's lithium stocks gold rush? Premium Widen out consumption to avert an income trap Premium Forget chatbots, this is how US companies are using AI - Believe this could be partly owing to some corporate customers, including MNCs, moving their banking relationship (including employee salary accounts). - The interest outgo on Citi's retained savings-customers would go up, as Axis's SA rate is higher at 3-3. 5 per cent vs Citi's 2. 5 per cent. - Axis Bank believes that bulk of the run-down, in terms of cards and deposits customers, is largely behind. - The normalized annual profit estimate of ₹ 8-8. 5 billion, without adjusting for synergy benefits, has been retained at the same level as in Mar-22, factoring-in the lower strain post Covid. So, acquisition value works out to be ~17. 7x the estimated profit for the acquired consumer banking business. - Axis Bank claims that it should be able to fund the acquisition via internal accruals and is not in any hurry to raise capital. - Believe the higher deposit run-down, coupled with optically higher loss in 4Q, could weigh on the stock performance. - Remain long-term positive on the stock, given its improving retail orientation/core profitability, healthy provisioning buffer and reasonable valuations. - Retain a ‘BUY’ rating, with a revised target price of ₹ 1,250 per share. Motilal Oswal - The acquisition of Citibank India's consumer business has added 1. 8 million credit cards to AXSB's outstanding cards and increased its market share by 3 per cent. - While synergies in terms of cost savings and RoA accretion will start to accrue from CY24, the deal should result in a higher capital charge (to be done in 4QFY23) and high integration costs of INR15b to be absorbed over the next two years. - In the long term, the deal’s success would depend on how well AXSB is able to cross-sell its entire bouquet of banking products to Citi customers and gain from Citi’s well recognized digital and operation processes. - The common equity tier-1 ratio is likely to moderate by 177 bp to 13. 8 per cent. - Factoring in the one-time charge-off and other costs and profitability, estimated RoA of 1. 9% and return on equity of 17. 6% by FY25. - Reiterate BUY with a target price of ₹ 1,130 per share. Know your inner investor Do you have the nerves of steel or do you get insomniac over your investments? Let’s define your investment approach. Take the test Catch all the Business News , Market News , Breaking News Events and Latest News Updates on Live Mint. Download The Mint News App to get Daily Market Updates. More Less Topics Axis Bank Axis Bank Ltd OPEN IN APP.