NAB acquires Citibank Aus

[Liski]

Dear customers

I am writing to let you know that Citi has reached an agreement with NAB for the acquisition of our Australian consumer business.

This is an exciting announcement for us. We opened our first consumer banking office in Australia in 1985, and after a long and rich history, it is with both nostalgia and confidence that I share with you this next evolution of our business.

NAB is one of Australia’s leading financial institutions, and it is a testament to the strength of Citi’s Australian business that they have purchased our consumer operations. I am confident this will be positive for you, our customers, as our business will benefit from the scale, technical expertise, and breadth of offering NAB can provide.

You will understandably have questions about how this impacts the products and services you currently receive from Citi.

There will be no immediate impact to your accounts, deposits, investments, mortgages, credit cards or any other products you may hold with us. Subject to the timing of regulatory approvals, completion is expected to occur by March 2022.

Until this time, our banking operations, including our call centres, Citibank online and mobile banking services will continue as usual.

As we progress through the transaction, I want to reassure you that we will keep you informed to ensure a seamless banking experience for you throughout this process.

We remain committed to delivering a high quality of service and I look forward to sharing further updates with you in the near future.

Regards

Alan Machet

CEO Consumer Banking, Citi Australia




Link: Letter to our customers

 

[jakeseven7]

Damn. NAB aren’t exactly a great consumer bank. Wonder if they will retain the brand under licence.

Will have to grab some bonus offers off NAB before they swallow Citi.

 

[Mattg]

I wonder if the ACCC will approve this acquisition?

 

[ChrisFlyer]

Also wonder whether Citi will retain Diners (both the cards, and the network), or whether NAB will own that too. I recall NAB was one of the first (if not the first?) of the big banks to have a companion AMEX card back in the day - could mean some interesting things ahead for Diners (or maybe that's just wishful thinking ).

 

[theblank]

Also wonder whether Citi will retain Diners (both the cards, and the network), or whether NAB will own that too.

Damn. NAB aren’t exactly a great consumer bank. Wonder if they will retain the brand under licence.

No need to wonder, the announcements/presentation included specific comments about both.
yes and yes!

 

[jakeseven7]

No need to wonder, the announcements/presentation included specific comments about both.
yes and yes!

Great that’s a start - hopefully they keep the Citibank plus debit, best international card.

 

[theblank]

Well despite my long standing disdain for NAB in certain respects ( nothing to do with RC outcomes) I do trust that the first thing on their agenda is not "make the customers we just bought very annoyed"

 

[Viridis]

One of the primary reasons for being with Citi was to escape the ‘big four’

i use the Prestige card. Looking at NAB’s suite of products now I can’t see them being bothered to maintain the perks. As a friend said (ex employee) “concierge and NAB don’t really go together”

Have already started to wind down my use, transferred my points to SQ and will wait and see but I suspect I’ll close the account before the annual fee falls due in the middle of next year

 

[Bell21]

Also wonder whether Citi will retain Diners (both the cards, and the network), or whether NAB will own that too. I recall NAB was one of the first (if not the first?) of the big banks to have a companion AMEX card back in the day - could mean some interesting things ahead for Diners (or maybe that's just wishful thinking ).

anything related to Diners is wishful thinking

 

[burmans]

Well despite my long standing disdain for NAB in certain respects ( nothing to do with RC outcomes) I do trust that the first thing on their agenda is not "make the customers we just bought very annoyed"

No, banks usually wait a year or two before doing that.

 

[Supersonic Swinger]

One of the primary reasons for being with Citi was to escape the ‘big four’

i use the Prestige card. Looking at NAB’s suite of products now I can’t see them being bothered to maintain the perks. As a friend said (ex employee) “concierge and NAB don’t really go together”

Have already started to wind down my use, transferred my points to SQ and will wait and see but I suspect I’ll close the account before the annual fee falls due in the middle of next year

Agree. For me, Big 4 = Definite No Way.

 

[theblank]

No, banks usually wait a year or two before doing that.

Thats interesting, when did that happen before?

 

[Supersonic Swinger]

Thats interesting, when did that happen before?

I have experiences where credit cards, online share traders and margin lenders I have used have been acquired and a year or two later, one of the key reasons I was using them was taken away by the acquirer.

In NAB's own investor presentation (https://yourir.info/e4600e4db4d0cc8...Citigroup_Agreement_Investor_Presentation.pdf), they have called out that between March 2022 and June 2024, they will "migrate products".

I would not be surprised if they weren't already drafting the wording along the lines of "Great news, your Citi Signature Mastercard is being transitioned to a NAB Executive Platinum Elite Diamond Rewards card. In recognition of your long standing relationship, you will receive a reduced annual fee in the first year."

Given that they have acquired about a million card accounts, they have probably already worked out that they can lose the small sliver of customers who had unprofitable fee free for life or discontinued products.

Maybe they will wear the cost and inconvenience for a while longer, but I doubt that, from a bank that decided to rename itself "nab" with a straight face...

 

[clifford]

Maybe they will wear the cost and inconvenience for a while longer, but I doubt that, from a bank that decided to rename itself "nab" with a straight face...

Must admit, I have accounts with all 4 majors, and "NAB" is the one I like least. Why is that I wonder?

Oh. and I also keep minimal funds there, just to maintain a relationship, of sorts.

 

[theblank]

I have experiences where credit cards, online share traders and margin lenders I have used have been acquired and a year or two later, one of the key reasons I was using them was taken away by the acquirer.

Which banks acquisitions were these?

 

[Supersonic Swinger]

Which banks acquisitions were these?

Credit cards: I had a "fee free for life" card in the US which was part of a portfolio acquired and migrated to a different product. And it doesn't even take an acquisition to change the terms, the fee free for life Macquarie Hilton Visa dropped its benefits when Macquarie and Hilton decided to part ways and Macquarie transitioned it to their sub-par gift card rewards card

Online share traders: ETrade used to integrate seamlessly with my bank account, after ANZ acquired it they required you to open an ANZ bank account to exclusively transact with it

Margin lenders: When St George acquired my margin loan, after a couple of years my product was no longer offered and to get the benefits I'd signed up required requesting special manual "exemptions" from their standard product.

And beyond banking, don't get me started on Optus' customer treatment when they acquired my wireless broadband provider.

The fee free for life Signature and discontinued 1% cashback cards probably only represent a sliver of the total card customers NAB acquired. There would be cost and effort in maintaining these discontinued niche products. To get the scale benefits they are looking for out of the acquisition, I wouldn't be surprised if they close those products and migrate the small number of affected customers to one of their more standard products, comfortable with any churn of what would be unprofitable customers.

Maybe existing holders will be surprised on the upside, but "surprised on the upside" is not a phrase generally associated with banks.

 

[exceladdict]

Wonder what it means for the visa plus debit accounts. Mainly retained that for travel, so it's not getting any use at the moment.

The only time I've stepped foot in a NAB is with Mrs Excel to close some old accounts... not a pleasant experience.

 

[Flashback]

Wonder what it means for the visa plus debit accounts. Mainly retained that for travel, so it's not getting any use at the moment.

The only time I've stepped foot in a NAB is with Mrs Excel to close some old accounts... not a pleasant experience.

Likely to be wound down - they're more or less exiting retail banking outside of the US (Citibank that is), and NAB doesn't really have any similar products that I'm aware of so can't see them offering it for long.

 

[theblank]

Maybe existing holders will be surprised on the upside, but "surprised on the upside" is not a phrase generally associated with banks.

not very comparable, for what australian banks do dont have to look back very far, such as CBA and WBC's acquisitions.
NAB is not acquiring Citi as a fire sale such as when a company is liquidating, in such instances for sure they are just buying a customer database, and for sure would migrate into their own products. But here NAB has a specific plan outlined what and where they want to improve.

not much point with the gloom and doom outlook, it doesn't cost anybody anything to wait and see.

 

[Supersonic Swinger]

not much point with the gloom and doom outlook, it doesn't cost anybody anything to wait and see.

It also doesn't cost anybody anything to prepare for the possibility that an 'exception' product such as the fee free for life Signature card is not transitioned over.

The "for life" is always the life of the product, not the life of the member. I understand the business sense this would make for NAB - it reduces the number of products they need to administer, and accelerates the overall portfolio synergies they are looking for out of the acquisition. Those synergies will far outweigh the few FFFL card holders who will close their account out of anger at being transitioned to a NAB product.

The best I would expect is being transitioned to some low value FFFL card, like Macquarie did when their relationship ended. My promotional fee free Hilton Macquarie card which gave instant Hhonors Gold, the possibility of Platinum just based on spend, a free annual night at a Hilton property as well as points, was transitioned to a fee free Black card which accumulates rewards at 0.5 cents per dollar only convertible into rewards cards at certain retailers. Hardly worth the hit to the credit score of holding the card.

Looking at NAB's card portfolio, there's nothing exciting in it which I'd imagine they will transfer FFFL Signature holders across to on a FFFL basis. They might transition to the NAB Rewards Signature with the first year annual fee waived.