Citi announces agreement to sell consumer bank to UOB Group
Citi announces agreement to sell consumer bank to UOB Group
Citi on Friday announced it has reached an agreement with UOB Group (UOB) on the acquisition of Citi’s consumer banking franchises in Viet Nam, Indonesia, Malaysia and Thailand.
The transaction includes retail banking and credit card businesses but excludes the bank’s institutional businesses in all four countries. Citi remains committed and focused on serving institutional clients in these countries locally, regionally and globally.
The agreement covers all related Citi staff, with approximately 5,000 consumer bank and supporting employees expected to transfer to UOB upon closure of the proposed transaction. UOB will pay Citi cash consideration for the net assets of the acquired businesses, subject to customary closing adjustments, plus a premium of US$690million.
Upon closing, Citi expects the transaction to result in the release of approximately $1.2 billion of allocated tangible common equity, as well as an increase to tangible common equity of over $200 million. As previously announced, Citi’s exit from its consumer franchises in 13 markets across Asia-Pacific and EMEA is expected to release approximately $7 billion of allocated tangible common equity over time.
Peter Babej, Citi Asia Pacific CEO, said: "We are excited to announce this transaction with UOB, a leading pan-Asian institution. We are confident that UOB, with its strong culture and broad regional ambitions, will provide excellent opportunities and a long-term home for our consumer banking colleagues in Indonesia, Malaysia, Thailand and Viet Nam.
"Focusing our business through these actions will facilitate additional investment in our strategic focus areas, including our institutional network across Asia-Pacific, driving optimal returns for Citi.”
UOB was selected by Citi following an extensive and competitive auction process. Citi is committed to a seamless transaction, and during the transition to closing, there will be no change in service provided to our consumer banking and wealth customers. Completion of the divestitures in each country will not be conditional on the completion of the divestitures in the other countries but will be conditional on obtaining regulatory approvals relevant to each country.
Vietnam Citi Country Officer Ramachandran A.S. said “This is a very positive outcome for our clients, our colleagues and for Citi. We have been serving our corporate and institutional clients with distinction for the last 28 years in Viet Nam. We shall continue to do so, executing our renewed strategy and assisting Viet Nam’s rapid economic growth.”
