Citi sells Southeast Asian consumer banks to UOB
Citi has reached a $3.7 billion deal to sell its consumer banks in Indonesia, Malaysia, Thailand and Vietnam to Singapore’s United Overseas Bank (UOB), including retail banking and credit cards , but excluding Citi’s institutional business, according to a Thursday, January 13. Press release.
About 5,000 consumer and support banking employees are expected to transfer to UOB when the transaction closes, the statement said. The deal will give Citi $1.2 billion in allocated tangible common stock, as well as an increase in tangible common stock of more than $200 million.
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Citi announced earlier this year that it was selling its consumer franchises in 13 markets in Asia Pacific (APAC) and Europe, the Middle East and Africa (EMEA). The sale is expected to give Citi approximately $7 billion in allocated tangible equity over time, according to the statement.
“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 Vietnam,” said the CEO of Citi Asia Pacific. Pierre Babej in the release. “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.”
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UOB has been selected by Citi to take over retail operations in the Southeast Asia region following a competitive bidding, the statement said. During the transition to closing, Citi has indicated that there will be no changes to services to retail and high net worth banking customers.
The transactions are expected to close between the middle of this year and early 2024, depending on the progress of the regulatory approval process, according to the statement. Citi’s Banking, Capital Markets and Advisory Group is Citi’s financial advisor on the transaction.
“The sale of these four consumer markets, along with our previously announced transactions, demonstrates our sense of urgency to execute our strategic refresh. We are committed to working in the best interest of our shareholders by focusing our resources on businesses that can generate growth, as well as increasing the capital that we return to shareholders over time,” said CFO of Citi. Marc Mason in the release.