Union Bank of the Philippines is to buy Citigroup Inc’s consumer banking assets in the Southeast Asian country for a cash consideration plus a premium of 45.3 billion pesos (US$905 million).
The deal covers the US firm’s local credit card, unsecured lending, deposit and investment businesses, as well as Citicorp Financial Services and Insurance Brokerage Philippines Inc, Citigroup and the Philippine lender said in separate statements yesterday.
About 1,750 employees are expected to transfer to the new owner, they said.
The transaction is expected to conclude in the second half of next year.
Under chief executive officer Jane Fraser, Citigroup is divesting consumer banking businesses in certain markets as it seeks to reshape itself around more profitable units, such as investment banking, while focusing its wealth franchise around hubs in Hong Kong, London, Singapore and the United Arab Emirates.
“We are delivering on our renewed strategy, focusing resources in areas where our global network positions us to deliver optimal growth and returns,” Citibank Asia Pacific CEO Peter Babej said in the statement.
The sale of the Philippine assets had drawn bids from other financial institutions, including BDO Unibank, Metropolitan Bank & Trust Co and Bank of the Philippine Islands, Bloomberg reported in October.
Union Bank was selected following an extensive and competitive auction process, Citigroup said.
Citigroup ultimately plans to exit retail-banking operations in Taiwan, Australia, Bahrain, China, India, Indonesia, Malaysia, Poland, Russia, South Korea, Thailand and Vietnam, although the lender would continue to serve corporations and private-banking clients in markets that it is otherwise leaving.
Union Bank would raise additional capital of as much as 40 billion pesos through a rights offering to help fund the acquisition, it said.
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