NAB (ASX:NAB) share price lifts amid news of bid to acquire Citi banking

Could NAB be hoping to purchase Australia's fifth largest credit card provider?

| More on:
The last piece of the jigsaw being fitted, indicating good news for a share price on merger or acquisition

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

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.

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.

More on Bank Shares

An ASX investor in a business shirt and tie looks at his computer screen and scratches his head with one hand wondering if he should buy ASX shares yet
Bank Shares

After the recent RBA rate cut, why is Macquarie underweight ASX bank shares?

Macquarie is not banking on strong returns from this sector.

Read more »

Business people discussing project on digital tablet.
Bank Shares

CBA vs Macquarie shares: Which one is best?

Ord Minnett has given its verdict on these giants.

Read more »

A woman wearing yellow smiles and drinks coffee while on laptop.
Bank Shares

How the CBA share price smashed the benchmark to close May at all-time highs

I hope you didn’t sell your CBA shares in April!

Read more »

A man casually dressed looks to the side in a pensive, thoughtful manner with one hand under his chin, holding a mobile phone in his hand while thinking about something.
Bank Shares

$10,000 invested in NAB shares 5 years ago is now worth…

NAB shares have delivered some benchmark smashing returns over the past five years.

Read more »

A man casually dressed looks to the side in a pensive, thoughtful manner with one hand under his chin, holding a mobile phone in his hand while thinking about something.
Bank Shares

Will CBA shares continue to outperform BHP shares over the next 5 years?

Which of these two giants will perform best? Let's find out.

Read more »

Bank building with the word bank in gold.
Bank Shares

What price targets does Macquarie have on the big 4 banks?

Here's what the broker has to say about the big 4 bank share prices.

Read more »

A man holds his hand under his chin as he concentrates on his laptop screen and reads about the ANZ share price
Bank Shares

Should I buy ANZ shares today?

With a 5.7% dividend yield, are ANZ shares a good buy right now?

Read more »

A woman sits at her computer with her hand to her mouth and a contemplative smile on her face as she reads about the performance of Allkem shares on her computer
Bank Shares

Can Bank of Queensland shares keep outperforming the other ASX 200 bank stocks into 2026?

A leading expert offers his verdict on what’s ahead for Bank of Queensland shares.

Read more »