The big four bank confirmed the news on Thursday after a review by the ACCC found that the transaction “would not substantially lessen competition”.
The review – which considered whether NAB’s acquisition of Citi would reduce competition in segments such as credit cards and the overall market – showed that the proposed acquisition was “unlikely” to raise concerns with competition in any other areas.
“Credit cards continue to be an important product for consumers, despite increasing use of other unsecured lending products such as buy now, pay later,” ACCC chair Rod Sims said.
“However, market feedback suggested that Citi is not unique with respect to its credit card offering, and many different credit card providers remain for consumers.
“NAB today is smaller in credit cards than its major bank rivals, and we don’t consider adding Citi’s card operations to NAB will materially change the level of competition.”
The review also looked at the provision of “white label” credit card services, given that NAB would be the dominant white label credit card supplier post-acquisition and might offer “less favourable” terms to partners. However, the ACCC found that the bank would be unlikely to act in this way.
“We are very concerned to ensure that mergers in the financial industry do not limit the competitive constraint provided by providers outside of the major four banks, however, in this case, the ACCC did not consider there would be a substantial impact in any market," Mr Sims said.
NAB first confirmed speculations it would acquire Citi in July. In August, market research firm Roy Morgan said the acquisition could boost NAB’s customer base to over 4.5 million; the second largest in Australia.
In the same month, NAB said it had agreed to purchase Citi’s Australian consumer business via an asset and liability transfer, with the bank to pay cash for the net assets of the Citigroup consumer business plus a premium of $250 million.