Citi on 13 January announced it had reached an agreement with UOB Group (UOB) on the acquisition of Citi’s consumer banking franchises in Indonesia, Malaysia, Thailand and Vietnam. The transaction includes retail banking and credit card businesses but excludes the bank’s institutional businesses in all four countries. Citi remains committed and focused on serving institutional clients in those countries locally, regionally and globally, the corporation said in a statement.
The agreement covers all related Citi staff, with approximately 5,000 consumer bank and supporting employees expected to transfer to UOB upon close of the proposed transaction. UOB will pay Citi cash consideration for the net assets of the acquired businesses, subject to customary closing adjustments, plus a premium of USD690 million.
Upon closing, Citi expects the transaction to result in the release of approximately USD1.2 billion of allocated tangible common equity, as well as an increase to tangible common equity of over USD200 million.
Citi’s exit from its consumer franchises in 13 markets across Asia Pacific and EMEA is expected to release approximately USD7 billion of allocated tangible common equity over time.
UOB was selected by Citi following an extensive auction process. Completion of the divestitures in each country will not be conditional on the completion of the divestitures in the other countries but will be conditional on obtaining regulatory approvals relevant to each country. It is estimated that completion will take place between mid-2022 and early 2024, depending on the progress and outcome of the regulatory approval process.
Citi’s Banking, Capital Markets and Advisory Group is acting as exclusive financial advisor to Citi in respect of the transaction.