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Citi to sell retail arms in 4 Southeast Asian markets to Singapore’s UOB for $3.65 bln

A man walks past a UOB bank branch in Singapore on November 4, 2020. REUTERS / Edgar Su

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  • UOB acquires operations in Indonesia, Malaysia, Thailand and Vietnam
  • To finance the acquisition of a retail business with internal capital
  • Purchase will double UOB’s retail business in 4 markets
  • Sale of Citi is part of strategy to focus on wealth management

SINGAPORE, Jan. 14 (Reuters) – Citigroup (CN) has agreed to sell its consumer businesses in four Southeast Asian markets to United Overseas Bank (UOB) (UOBH.SI) for S $ 4.915 billion (3 , $ 65 billion), bringing the U.S. bank closer to its goal of exiting retail operations in 13 markets.

The proposed acquisition by UOB will be the largest in two decades and will double the group’s retail customer base in the four markets of Southeast Asia, where the Bank of Singapore already has a strong presence and competes with its competitors DBS Group (DBSM.SI) and OCBC. (OCBC.SI).

Citi’s exit from Southeast Asia comes after CEO Jane Fraser said last year the bank would close retail operations in 13 markets, including 10 in Asia, to refocus on business more lucrative institutional and wealth management institutions. Read more

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“Focusing our business on these stocks will facilitate further investments in our strategic focus areas, including our institutional network across Asia-Pacific, generating optimal returns for Citi,” said Friday Peter Babej, CEO of Citi for Asia-Pacific, in a press release.

UOB, Southeast Asia’s third-largest bank, has announced that it will acquire Citi’s secured and unsecured loan portfolios, as well as wealth management and retail deposit operations in all four countries.

“UOB believes in the long term potential of South East Asia and we have been disciplined, selective and patient in seeking the right growth opportunities,” said Wee Ee Cheong, vice president and general manager of UOB .

The bank said the proposed acquisition should be funded by its excess capital and that it remains comfortable maintaining its dividend policy of a 50% payout ratio.

Citi’s consumer business in all four markets employs approximately 5,000 people, who will be transferred to UOB.

“The total cash consideration of the proposed acquisition will be calculated based on an aggregate premium equivalent to S $ 915 million plus the net asset value of the consumer activity at the date of completion,” UOB said.

He said Citigroup’s consumer activities in these markets had an aggregate net asset value of approximately S $ 4 billion and customer base of approximately $ 2.4 million as of June 30, 2021. These generated revenue of approximately S $ 0.5 billion in the first half of 2021.

Last year, Citi agreed to sell its retail banking franchise in the Philippines, liquidate its South Korean consumer bank and sell its retail banking business in Australia.

Citigroup had also announced its intention to withdraw from its retail operations in India, Taiwan and China.

Credit Suisse (Singapore) is UOB’s financial advisor on the latest transaction, while Allen & Overy LLP (Singapore) is legal advisor.

($ 1 = 1.3461 Singapore dollars)

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Reporting by Anshuman Daga in Singapore; Editing by Kenneth Maxwell and Himani Sarkar

Our standards: Thomson Reuters Trust Principles.





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