SYDNEY, AAP – National Australia Bank is buying Citigroup’s consumer business and the two are devising new buy now, pay later products.

NAB on Monday said it would gain Citi’s Australian lending business including credit cards, home lending portfolio, retail deposits and wealth management arms.

Bank boss Ross McEwan said credit cards and unsecured lending continued to be an important way for customers to make payments.

There are more than 16 million credit cards being used by Australians, according to the bank.

NAB leaders aren’t ignoring buy now, pay later services however, with Mr McEwan telling analysts in an interview that the bank was developing a product in this field, as was Citigroup.

Citigroup’s product is likely to be a ‘white label’ one.

Citigroup already provides credit cards to airlines, retail chains and financial groups, which these companies brand as their own. The bank will take over these relationships.

Mr McEwan declined to give more details of the new products.

He said having a greater share of payments would help the personal banking business.

NAB will pay cash for the assets and a premium of $250 million.

Citigroup has home loan assets worth $7.9 billion, unsecured lending assets (credit cards) of $4.3 billion and deposits of $9 billion.

Regulators including the Australian Competition and Consumer Commission must approve the proposed deal.

NAB shares were higher by 0.97 per cent to $26.95 at 1601 AEST.