Citigroup sells Philippine retail banking business to UnionBank
US banking major Citigroup said on December 23 that it is selling its consumer banking business in the Philippines to Union Bank of the Philippines, or UnionBank.
The latter which will pay cash for the net assets of Citi Philippines plus a premium of 45.3 billion pesos, in total 55 billion pesos ($1.1 billion).
UnionBank, whose largest shareholder is Aboitiz Equity Ventures of Filipino billionaire family Aboitiz, already has been named a preferred bidder for Citi Philippines earlier this month.
The deal includes Citi’s credit card, personal loans, wealth management and retail deposit businesses, Citicorp Financial Services, the bank’s insurance brokerage in Philippines, as well as its real estate assets, namely Citibank Square on Eastwood Avenue, Quezon City, three full-service bank branches, five wealth centers and two self-services branches. It also covers all Citigroup-related staff, of which around 1,750 employees are expected to transfer to UnionBank.
Institutional banking in the Philippines business remains operative
According to Citi’s Asia-Pacific CEO Peter Babej, the bank will continue to serve institutional clients in the Philippines where it provides a range of services to over 950 multinational corporations, as well as leading local corporations, including 90 per cent of the top 20 companies by market capitalisation on the Philippine Stock Exchange.
UnionBank said the purchase was part of a bid to boost growth in its retail banking sector. To fund the acquisition, the bank would use “internal resources” and raise additional capital of up to 40 billion pesos through a stock rights offering. The transaction with Citi is expected to close in the second half of 2022.
UnionBank said Citi customers will be contacted in the coming months to be given more details about the transaction and what its means for their banking routines.
Exit from retail banking in 13 markets
Citigroup earlier this year announced that it would withdraw from its consumer business in 13 markets in Asia, Asia-Pacific, Eastern Europe and the Middle East.
The sale of the Philippine assets was the third of the planned exits after Citigroup said in August that it would to sell its Australian consumer unit to National Australia Bank, while it would shut down its retail operations in South Korea.
Citigroup also plans to exit from retail operations in Bahrain, China, India, Indonesia, Malaysia, Poland, Russia, Taiwan, Thailand and Vietnam as it does not have enough scale in those markets to compete with established banks, Jane Fraser, Citigroup chief executive officer, has said.
US banking major Citigroup said on December 23 that it is selling its consumer banking business in the Philippines to Union Bank of the Philippines, or UnionBank. The latter which will pay cash for the net assets of Citi Philippines plus a premium of 45.3 billion pesos, in total 55 billion pesos ($1.1 billion). UnionBank, whose largest shareholder is Aboitiz Equity Ventures of Filipino billionaire family Aboitiz, already has been named a preferred bidder for Citi Philippines earlier this month. The deal includes Citi's credit card, personal loans, wealth management and retail deposit businesses, Citicorp Financial Services, the bank’s insurance...
US banking major Citigroup said on December 23 that it is selling its consumer banking business in the Philippines to Union Bank of the Philippines, or UnionBank.
The latter which will pay cash for the net assets of Citi Philippines plus a premium of 45.3 billion pesos, in total 55 billion pesos ($1.1 billion).
UnionBank, whose largest shareholder is Aboitiz Equity Ventures of Filipino billionaire family Aboitiz, already has been named a preferred bidder for Citi Philippines earlier this month.
The deal includes Citi’s credit card, personal loans, wealth management and retail deposit businesses, Citicorp Financial Services, the bank’s insurance brokerage in Philippines, as well as its real estate assets, namely Citibank Square on Eastwood Avenue, Quezon City, three full-service bank branches, five wealth centers and two self-services branches. It also covers all Citigroup-related staff, of which around 1,750 employees are expected to transfer to UnionBank.
Institutional banking in the Philippines business remains operative
According to Citi’s Asia-Pacific CEO Peter Babej, the bank will continue to serve institutional clients in the Philippines where it provides a range of services to over 950 multinational corporations, as well as leading local corporations, including 90 per cent of the top 20 companies by market capitalisation on the Philippine Stock Exchange.
UnionBank said the purchase was part of a bid to boost growth in its retail banking sector. To fund the acquisition, the bank would use “internal resources” and raise additional capital of up to 40 billion pesos through a stock rights offering. The transaction with Citi is expected to close in the second half of 2022.
UnionBank said Citi customers will be contacted in the coming months to be given more details about the transaction and what its means for their banking routines.
Exit from retail banking in 13 markets
Citigroup earlier this year announced that it would withdraw from its consumer business in 13 markets in Asia, Asia-Pacific, Eastern Europe and the Middle East.
The sale of the Philippine assets was the third of the planned exits after Citigroup said in August that it would to sell its Australian consumer unit to National Australia Bank, while it would shut down its retail operations in South Korea.
Citigroup also plans to exit from retail operations in Bahrain, China, India, Indonesia, Malaysia, Poland, Russia, Taiwan, Thailand and Vietnam as it does not have enough scale in those markets to compete with established banks, Jane Fraser, Citigroup chief executive officer, has said.
