Citi to Retail Arms in 4 Southeast Asian Markets to Singapore’s UOB for $3.65 Billion

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

SINGAPORE, Jan 14 (Reuters) – Citigroup (CN) has agreed to sell its consumer business 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.

UOB’s proposed acquisition will be its largest in two decades and will double the group’s retail customer base in all four Southeast Asian markets, where the Singaporean bank already has a large presence and competes with rivals DBS Group. (DBSM.SI) and OCBC. (OCBC.SI).

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

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

UOB, Southeast Asia’s third-largest bank, said it would acquire Citi’s unsecured and secured loan portfolios, wealth management and retail deposit businesses in all four countries.

“UOB believes in the long-term potential of Southeast Asia and we have been disciplined, selective and patient in finding the right growth opportunities,” said Wee Ee Cheong, Vice President and General Manager of UOB. .

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

Citi’s consumer business in the four markets employs approximately 5,000 employees, who will transfer to UOB.

“The total cash consideration for the proposed acquisition will be calculated on the basis of an aggregate premium equivalent to S$915 million plus the net asset value of the consumer business on completion,” the statement said. ‘UOB.

He said Citigroup’s consumer businesses in these markets had an aggregate net asset value of around S$4 billion and a customer base of around 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 consumer banking franchise in the Philippines, liquidate its South Korean consumer bank and sell its consumer banking business in Australia.

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

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

($1 = 1.3461 Singapore dollars)

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

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