Citigroup sells consumer bank in the Philippines to Unionbank

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MANILA, Dec. 23 (Reuters) – Citigroup Inc (CN) on Thursday announced it was selling its Philippine retail banking business to UnionBank (UBP.PS) as part of the third of 13 planned Asian franchise exits.

Citigroup said the transaction in the Philippines would increase its tangible equity by approximately $ 500 million out of the total increase of $ 7 billion it expects to come from the Asia divestiture plan it announced. in April.

For Unionbank of the Philippines, the purchase is part of an offer to boost growth in its retail banking sector.

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Unionbank will pay the net assets of Citi Philippines’ consumer banking business plus a premium of 45.3 billion pesos, or about $ 908 million, in cash, Citigroup said.

The agreement includes Citi’s credit card, personal loan, wealth management and retail deposit business, as well as real estate assets. It covers all staff linked to Citigroup and some 1,750 employees are expected to be transferred to Unionbank.

Citigroup announced in August that it would sell its Australian consumer unit to the National Australia Bank (NAB.AX) for nearly $ 882.24 million.

Citigroup has also announced that it will close its operations in Korea. It expects to take a cash charge of $ 1.2 billion to $ 1.5 billion for costs related to the shutdown. Read more

Citigroup also plans to pull out of its retail operations in Bahrain, China, India, Indonesia, Malaysia, Poland, Russia, Taiwan, Thailand and Vietnam.

The bank does not have enough stature in the markets to compete, said Jane Fraser, CEO of Citigroup.

At the end of June, Citi’s personal banking business in the Philippines had total assets of 89.5 billion pesos, including gross loans of 59.7 billion pesos, total liabilities of 71.7 billion pesos including deposits of 67.8 billion pesos, and a clientele of nearly 1 million.

Unionbank said its acquisition, which is expected to be finalized in the second half of 2022, will be funded by a combination of internal resources and an offer of equity rights.

“We look forward to this revolutionary opportunity to overtake our credit card business and significantly expand our banking business into the premium segment of the consumer market,” said Unionbank President and CEO, Edwin Bautista, in a press release.

($ 1 = 50.1100 Philippine pesos)

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Reporting by David Henry, Neil Jerome Morales and Enrico Dela Cruz; Editing by Ed Davies and Mark Porter

Our standards: Thomson Reuters Trust Principles.


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