Mr McEwan said the bank was big enough to defend itself against competitors including the mainly unregulated buy-now-pay-later crowd but argued the rules should be the same for everyone.
I enjoy the competition and believe as a major bank we can compete but it would be nice to have a level playing field, particularly when they get to the scale and size of a Square and an Afterpay but Ill leave that to the regulators, Mr McEwan said.
The transaction is being conducted on a multiple of eight times earnings and NAB expects around 800 of Citis employees to come across to the bank. The platform does not form part of the transaction with NAB planning to develop something new.
The bank plans to leverage the data that comes with the transaction with its no-interest Straight Up product launched in September 2020.
Straight Up is a buy-now-pay-later competitor that accounts for one out of every three credit card applications at the bank and was developed by NABs personal banking boss Rachel Slade.
We are really excited by the opportunity that the transactions data and payments data presents, Ms Slade said.
Citis $12.2 billion loan book consists of $7.9 billion in mortgages and $4.3 billion in unsecured lending with the majority held on credit cards.
NAB holds around $267.7 billion in mortgages and $3.9 billion in credit cards according to data from APRA to June.
A successful transaction will see NAB challenge rival bank CBA for dominance of the credit card market. CBAs credit card book was $8.1 billion according to the most recent data from APRA.
Last year Commonwealth Bank began a push into business banking and has made it clear it wants to challenge NAB for the mantle of Australias biggest business bank.
Data released by the Reserve Bank on Monday showed the number of card accounts had fallen to the lowest in 14.5 years to 13.3 million.
Total credit card purchases over the 12 months to June 2021 rose 12.3 per cent to 265 million while the number of debit card purchases rose 11.3 per cent to 774.3 million.
Mr McEwan was confident the transaction would not be thwarted by the competition regulator citing a healthy competitive environment.
There are still a lot of players in the credit card business Mr McEwan said.
We dont believe it significantly changes the dynamics of the market from a competition point of view.
NAB shares were up 1.3 per cent in late afternoon trade in line with rival banks which were 1.3 per cent and 1.5 per cent higher.
The announcement follows NABs decision on July 30 to deploy $2.5 billion in surplus capital into an on-market buyback. NAB will deliver a third quarter update on Thursday, the day after Commonwealth Bank delivers full year results.