Axis to retain Citi staff, pay scale to be largely same
Citibank staff who choose to join Axis Bank will enjoy pay structures similar to what they get now, while the rest can move to other Citi verticals that are not being sold, two people aware of the plans said.
Employees who do not find the fresh offers acceptable will get two to three months to find another job, the people said on condition of anonymity. Axis had said last week that it would pay Citi employees same as or higher than their current remuneration. “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,” one of the two people said.
On March 30, Axis Bank said it has agreed to buy Citibank’s consumer business in India for ₹12,325 crore ($1.6 billion) in cash, apart from paying another ₹1,200 crore to Citi to aid the transition. By protecting salaries and pay structures of Citi staff, Axis Bank is trying to ensure that most of them move to Axis once the merger is complete.
Apart from the high-spending credit card customers, relationship managers in Citi’s wealth management team is another lucrative aspect of the deal for Axis Bank, said the people cited above. According to these people, Citi had allowed employees of the consumer business arm a couple of months ago to apply for internal postings to remain in the organization.
“Relationship managers, about 10% 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 person cited above.
The addition of experienced wealth managers from Citi would give an impetus to Axis Bank’s premium banking programme Burgundy.
Analysts at ICICI Securities said Axis Bank will be able to leverage the Burgundy platform to serve over 40,000 affluent customers and over 100 ultraHNI families. “It will further strengthen Axis Bank’s franchise through a 42% addition to overall Burgundy assets under management (AUM) making it the third-largest wealth manager by combined AUM,” the brokerage said in a note on March 31.
The agreement between Axis and Citi entails protecting staff salaries, and Citi has tried to ensure the same in every consumer businesses it is selling, the person cited above added.