Citigroup has agreed to sell its consumer businesses in four Southeast Asian markets to UOB for 5 billion Singapore dollars (3.7 billion US dollars), bringing the US bank closer to its goal of phasing out its retail business in 13 markets. Read more [National Australia Bank buys Citi’s domestic consumer business].
The deal proposed by Singapore’s UOB would be its largest in the past two decades and nearly double its retail client base in the four Asian markets, where the bank already has a huge presence and competes with other giant banks such as DBS Group and OCBC.
UOB Bank, the third largest bank in Southeast Asia, will acquire Citi’s secured and unsecured lending portfolio, wealth management and retail deposit business in four countries, including 24 branches and approximately 5,000 Citi employees, all of whom will join UOB, whose share rose after the news by 2.4% to its highest level in 4 years, outperforming the performance of the broader Singaporean market index.
UOB will finance the transaction with excess capital, has stated that it will maintain a dividend policy of 50% return, and excluding acquisition charges, the Bank anticipates that the transaction will immediately enhance its earnings per share and equity returns, and aims to close the transaction, which needs regulatory approvals, by the first quarter of 2024, Credit Suisse will be UOB’s financial advisor while Allen & Overy will act as its legal advisor.
Wall Street banks, including Citigroup, had a distinguished year in 2021 with strong results and huge deals and IPOs that sent their shares flying. Read more [Citigroup Publishes A Record Jump In Third-Quarter Profits], [Wall Street Banks Gear Up For Strong Profits Again] and [Giant Bank Stocks Boom, With 2021 Results Awaiting].