The Union Bank of the Philippines, led by Aboitiz, is the “preferred bidder” for Philippine retail and consumer banking assets of US banking giant Citigroup, according to a Bloomberg Newswire report.
In the coming weeks, UnionBank will negotiate the sale under a potential deal valued at $ 1 billion, Bloomberg reported on Wednesday, citing anonymous sources.
“This is somewhat surprising given that one of the top three banks had to win,” said Raymond Neil Franco, head of research at Abacus Securities, a local brokerage firm.
“Citi’s consumer activities in the Philippines should match UnionBank’s corporate and treasury strength. Along with the push towards digital banking, this shows that UnionBank is serious about expanding its retail segment. But the price has to be right, so we are still waiting for the details before reassessing our rating for the share, ”he added.
“We believe the potential acquisition will complement UnionBank’s existing consumer portfolio with Citi’s very strong credit card portfolio. It should be noted that mortgage loans and salary loans represent the bulk of UnionBank’s consumer loans. As such, we expect the acquisition to accelerate UnionBank’s growth in credit cards, ”said John Luciano, banking analyst at COL Financial.
At the end of June, UnionBank was ranked 10th among the largest banks in the country, with total assets of 646 billion pesos. As of Wednesday’s close, the bank was valued by the stock market at 130.47 billion pesos.
Aboitiz Equity Ventures has interests in banking, energy, real estate, food, cement manufacturing and infrastructure. Citi Philippines ranked 12th during the same period, with total assets of 353.97 billion pesos. “It will be good for UnionBank if they can retain customers,” said Joseph Roxas, president of Eagle Equities Inc.
To subscribe to REQUEST MORE to access The Philippine Daily Inquirer and over 70 titles, share up to 5 gadgets, listen to the news, download from 4 a.m. and share articles on social media. Call 896 6000.