After the sale of Citigroup’s retail customers was announced at the end of 2021 amid speculation about who would take it. Recently, it has been announced and the press conference is clear that Those who can grab the business of Citigroup’s retail customers are banks affiliated with UOB Group. It was valued at $3.65 billion and confirmed that all 5,000 employees in four countries will continue to work after the acquisition process is complete.
Therefore, the future strategy Services or work processes are subject to the terms of the policies in each country.
In a statement from UOB,
A subsidiary of the United Overseas Bank Group entered into an agreement to acquire Citigroup’s retail customers This includes unsecured and secured loans. wealth management business and retail deposit business (Retail Business) in Indonesia, Malaysia, Thailand and Vietnam (Acquisition) and includes Citigroup Retail Business Employees. This acquisition will strengthen and expand UOB’s business scope in ASEAN.
Citigroup’s retail business has total net assets of approximately S$ 4 billion. and a customer base of approximately 2.4 million as of June 30, 2021 and revenues of approximately S$0.5 billion. in the first half of 2021, excluding expenses incurred in the one-time transaction. The proposed acquisition is expected to increase UOB’s earnings per share (EPS) and return on equity (ROE) immediately.
Determination of the cash offer for this acquisition will be based on a total premium equivalent to S$915 million. Plus the net asset value of the retail business once the transfer is complete. UOB will use the bank’s surplus funds for this proposed acquisition. It is expected to reduce the Bank’s Tier 1 (Common Equity Tier 1 or CET1) ratio by 0.7% to 12.8% based on its capital position as of September 30, 2021. The impact on the CET1 ratio is expected to be minimal and will remain within regulatory requirements of regulatory bodies.
Acquisitions in each country will be completed with the approval of the Banking Regulators in accordance with the terms of each country. including Singapore Completion is expected between mid 2022 and early 2024, subject to progress and results of the regulatory approval process. Citigroup will work with UOB and its affiliated banks. (collectively referred to as the United Overseas Bank Group) closely to allow retail customer business transfers Both customers and employees go smoothly.
Mr. Wee E Chiang, Vice Chairman and Chief Executive Officer, UOB said, “The acquisition of Citigroup’s retail customers in four countries – Indonesia, Malaysia, Thailand and Vietnam – is a huge opportunity that has arrived at the right time. UOB believes in the long-term growth potential of Southeast Asia. And we have the discipline and patience to search for the right opportunity to grow our business. while awaiting approval from the bank regulator. We look forward to transferring Citigroup’s quality business portfolio. and prepare to welcome the team including creating value for the customer base Employees and stakeholders our enlarged
This acquisition combines the number of UOB consumers in the region. It will be a powerful consolidation in the expansion of UOB Group’s business. and quickly become a leading regional bank.”
UOB’s retail strategy is to tap into the growing wealthy segment in Southeast Asia. Penetration of the new generation through UOB TMRW, the bank’s digital platform and providing financial services through a variety of channels (Omni-channel) to continuously increase wealth. The proposed acquisition will expand UOB’s partner network and doubling the size of its retail client businesses in all four countries. Accelerate the expansion of the customer base in the region up to five years faster
Citigroup’s retail business employs approximately 5,000 people, including senior management and experienced teams. Joining UOB will strengthen UOB Group.
UOB Group is ready to welcome Citigroup customers and employees. We will receive information on the progress of the proposed acquisition in the coming months.
Peter Babej, CEO of Citi Asia Pacific, said: “We are delighted to announce this transaction with UOB, Asia’s leading financial institution. We are confident that UOB has a strong culture and potential of the banking network in the region. It will provide a wonderful opportunity and a secure home for fellow employees of our retail business in Indonesia, Malaysia, Thailand and Vietnam. This will allow us to increase investment in our focus strategies, including our network of institutional clients across Asia Pacific. to create the most suitable return for City.”
The deal covers approximately five thousand Citi employees in total. This consists of bank employees in the individual business and employees in the personal business support department. which will be transferred to UOB upon completion of the sale The deal is based on the net worth of the business. and depends on the update list when complete. plus a premium of SGD 915 million [690 ล้านดอลลาร์สหรัฐ]
UOB has been selected by City following an open and competitive bidding process, which City is committed to making the transaction go smoothly. The completion of a sales transaction in each country is independent of each other.
Depending on the timing of regulatory approvals and country conditions, completion is expected in mid-2022 to early 2024, depending on the progress and results of the regulatory approval process.
Source: Router, Citi, UOB
