Citi has reached an agreement with UOB Group (UOB) on the acquisition of its consumer banking franchises in Indonesia, Malaysia, Thailand and Vietnam.
The transaction includes the retail banking and credit card businesses but will exclude Citi’s institutional businesses in all four countries. Citi will continue to serve institutional clients in those countries locally, regionally and globally.
UOB will pay Citi a cash consideration for the net assets of the acquired businesses as well as a premium of US$690 million.
The agreement includes all related Citi staff and an estimated 5,000 consumer bank and supporting employees are expected to transfer to UOB.
The release of the franchises come as part of Citi’s wider exit from its consumer franchises in 13 markets across Asia and EMEA through which it expects to release $7 billion in allocated tangible common equity to put towards other areas of the business.
Peter Babej, Citi Asia Pacific CEO, said, “We are confident that UOB, with its strong culture and broad regional ambitions, will provide excellent opportunities and a long-term home for our consumer banking colleagues in Indonesia, Malaysia, Thailand and Vietnam. Focusing our business through these actions will facilitate additional investment in our strategic focus areas, including our institutional network across Asia Pacific, driving optimal returns for Citi.”
An agreement was reached between the two after Citi selected UOB following an auction process. Completion of the agreement is expected between mid-2022 and early 2024.
In December, Citi announced that it was exiting the consumer, small business and middle market banking operations of Citibanamex in Mexico as part of a wider strategic refresh.