Citi to sell Southeast Asian assets in $3.6 billion deal – ฺBangkok Post

Written by Amanda

Citi to sell Southeast Asian assets in $3.6 billion deal  ฺBangkok Post

A traffic light is pictured in front of a Citibank branch in Singapore. (File Photo: Reuters)
A traffic light is pictured in front of a Citibank branch in Singapore. (File Photo: Reuters)

Citigroup Inc agreed to sell consumer-banking businesses in Indonesia, Malaysia, Thailand and Vietnam to United Overseas Bank (UOB) Ltd for about S$4.9 billion (US$3.6 billion), as Chief Executive Officer Jane Fraser continues her push to simplify the New York-based bank.

UOB will pay Citigroup a cash consideration for the net assets of the acquired businesses plus a premium of S$915 million, Citigroup said Thursday in a statement. The transaction includes Citigroup’s retail banking and credit card businesses in all four countries but excludes its institutional offerings.

“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,” Peter Babej, who oversees Citigroup’s business in Asia, said in the statement. “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.”

The deal will give UOB, Southeast Asia’s third-largest lender, a greater foothold in the region. Citigroup expects roughly 5,000 employees to transfer to UOB after the deal closes, according to the statement.

Under Fraser, Citigroup has sought to dispose of its retail banking operations in 13 different countries across Asia and Europe and instead focus on building out its burgeoning wealth management arm. This week, the firm announced it would also seek to exit its consumer, small business and middle market banking businesses in Mexico. 

Citigroup announced a deal to sell the first of those 13 markets in August, when it said National Australia Bank Ltd. would pick up its unit in Australia. In November, the firm warned it would take charges of $1.2 billion to $1.5 billion as it winds down retail operations in South Korea. Last month, Union Bank of the Philippines agreed to buy the assets in that country.

“The sale of these four consumer markets, along with our previously announced transactions, demonstrate our sense of urgency to execute our strategic refresh,” Chief Financial Officer Mark Mason said in the statement. “We are committed to working in the best interests of our shareholders by focusing our resources on businesses that can deliver growth, as well as increasing the capital we return to shareholders over time.”

Tibor Pandi, Country Head, Citi Thailand said: “This transaction represents a positive outcome for our clients, our colleagues and our firm. 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.”

“Thailand remains a key market for Citi globally and we remain committed and focused on serving institutional clients locally, regionally, and globally as we have for over half a century,“  he added.

Source: bangkokpost.com

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