In four Southeast Asian markets, the U.S. bank has agreed to sell its consumer business to the United Overseas Bank UOB for S $4.915 billion $3.65 billion, bringing it closer to its goal of exiting retail operations in 13 markets.
Citi's exit from Southeast Asia came after CEO Jane Fraser said last year the bank would close retail operations in 13 markets, including 10 in Asia, to focus on its more lucrative institutional and wealth management businesses.
In a statement on Friday, Citi's Asia Pacific CEO, Peter Babej, Citi's Asia Pacific CEO, said that our business through these actions will enable further investment in our strategic focus areas, including our institutional network across Asia Pacific.
UOB, Southeast Asia's third largest bank, said it would acquire Citi's unsecured and secured lending portfolios, wealth management and retail deposit businesses in the four countries.
The UOB believes in Southeast Asia's long-term potential and we have been disciplined, selective and patient in seeking the right opportunities to grow, said Wee Ee Cheong, UOB's deputy chairman and chief executive.
The bank said the proposed acquisition will be financed through its excess capital, and it is comfortable maintaining its dividend policy of a 50% payout ratio.
Citi's consumer business in the four markets employs around 5,000 employees who will be transferred to UOB.
The total cash consideration for the proposed acquisition will be calculated based on an aggregate premium equivalent to S $915 million plus the net asset value of the consumer business at the end of the proposed acquisition, UOB said.
Income of around S $0.5 billion was generated in the first half of 2021.
A year ago, Citi agreed to sell its Philippine consumer banking franchise, shut down its South Korean consumer bank and sell its Australian consumer banking business.
There were plans to exit retail operations in China, Taiwan and India.
Business Standard has always tried to provide up-to-date information and commentary on developments that are of interest to the country and the world, and have wider political and economic implications for the country and the world. Our resolve and commitment to these ideals have been strengthened by your encouragement and constant feedback on how to improve our offering. Even during the hard times that have arisen out of Covid-19, we are committed to keeping you informed and informed with credible news, authoritative views and incisive commentary on topical issues of relevance.
We have a request.
Many of you who have subscribed to our online content have been encouraged by our subscription model. More subscribers can help us achieve our goal of giving you more relevant and better content. We believe in free, fair, and credible journalism.