Insights

Green light: NAB (ASX:NAB) share price slips as ACCC gives nod to Citi deal

The bank isn’t catching bids today as the ACCC gives the green light for its proposal to buy Citi’s Australian consumer business.
The post Green light: NAB (ASX:NAB) share price slips as ACCC gives nod to Citi deal appeared first on The Motley Fool Australia. –

Shares in banking giant National Australia Bank Ltd (ASX: NAB) are in the red today, trading 0.23% lower at $28.39 at the time of writing.

NAB shares are tipsy this morning following a company announcement on its proposed acquisition of Citigroup‘s Australian consumer business.

The bank advised that the Australian Competition and Consumer Commission (ACCC) would not oppose its acquisition of Citi’s Australian consumer business after a review found the transaction would not substantially lessen competition.

Here are the details.

What’s the deal?

NAB first announced entered into a sale and purchase agreement with Citigroup Australia and proposed to buy its consumer business back in August. At the time, NAB touted the proposal as a “strategic growth ambition for its personal banking business”.

Both NAB and Citi overlap in the supply of consumer banking products and services in Australia, including credit cards, personal loans, and home loans for example.

According to the watchdog, evidence showed that the proposed acquisition was unlikely to raise competition concerns in any other areas of overlap, given Citi’s minimal market share in these markets.

The ACCC’s review also zoned in on competition in the supply of credit cards, as Citi is a substantial provider credit card services in Australia.

For instance, a focal point of the investigation was the provision of ‘white label’ credit card services. Following the acquisition, NAB will be the dominant white label credit card supplier to a number of commercial partners.

What are white label credit cards?

White label credit cards refer to card products issued by a financial institution as a partnership with a third party, usually a large company. Here’s the way it works:

Vendors such as NAB fund and issue credit cards to consumers via “third party distributors”, called white label partners.
The card provider “supplies unsecured credit funding, technology, human capabilities and other services to partners to enable them to market credit cards with their branding to consumers”.
White label partners are typically responsible for marketing and customer acquisition.
Functions like approvals are carried out by the card supplier.

What about competition?

The review also considered whether NAB’s acquisition of Citi would reduce competition in the entire credit card market, including offshoots such as rewards programs.

The ACCC concluded that NAB would still face a healthy level of competition from a range of credit card suppliers. It also noted that “NAB today is smaller in credit cards than its major bank rivals”.

As the bank reported, “the ACCC was particularly focussed on whether post-acquisition NAB might offer less favourable terms to these white label partners, such as smaller banks, with the aim of enhancing the position of NAB’s own branded credit cards”.

However, the ACCC found that NAB would be unlikely to have an incentive to act in that way after the acquisition.

ACCC chair Rod Sims concluded:

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.

NAB share price snapshot

In the past 12 months the NAB share price has climbed more than 17% after rallying almost 25% this year to date. In the past month, it has reversed course and is now 2.5% in the red.

Over the longer term, NAB shares have outpaced the S&P/ASX 200 index (ASX: XJO)’s return of around 12% in the last year.

The post Green light: NAB (ASX:NAB) share price slips as ACCC gives nod to Citi deal appeared first on The Motley Fool Australia.

These 5 Cheap Shares Could Be Set For Huge Gains (FREE REPORT)

We hear it over and over from investors, “I wish I had bought Altium or Afterpay when they were first recommended by The Motley Fool. I’d be sitting on a gold mine!” And it’s true.

And while Altium and Afterpay have had a good run, we think these 5 other stocks are screaming buys. And you can find out the names of these stocks in the FREE stock report.

*Extreme Opportunities returns as of February 15th 2021

More reading

ASX 200 (ASX:XJO) midday update: EML rockets, NAB given ACCC green light

Macquarie (ASX:MQG) is now a big four bank

Is the CBA (ASX:CBA) share price premium relative to other big banks justified?

Why this fundie likes NAB (ASX:NAB) shares in a firming interest-rate environment

Analysts name 2 ASX 200 blue chip shares to buy now

The author has no positions in any of the stocks mentioned. 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.

Trade The World Anywhere & Anytime!

Mobile app platform with over 50,000 global listed securities across 12 markets (over 70% global market capitalisation), right from your Android or iOS device.

Integrated with exclusive trading idea and investment analysis tools to help you find actionable insight on virtually every financial instrument across our 12 global markets, to help you optimise your trading strategies.

Refer Your Friends

Tell your friends about Monex and gift them FREE access to our trading tools.

We respect your privacy and will only send this one email notification to your friends. 

Share With Your Friends

Share on facebook
Share on twitter
Share on linkedin

Monex Trading Tools Access and Usage Terms

The Monex Trading Tools (referred to as ‘tools’ hereafter) are available to you inside your client portal;


To activate access to the tools, you must have a verified and approved trading account and have made a deposit of at least AUD $1000.


An active and funded account with a positive trading balance is required to continue to have access to the tools;


Although the tools are available to you indefinitely, Monex Securities may at it’s discretion disable access to the tools in the future;


Monex securities reserves the right to change these terms and conditions from time to time, as it sees fit, without notice.

Important Notice
iOS & Android App - 12 International Markets & Over 70% Global Market Cap. $0 Brokerage On US Trades. Click Here!