UOB is to buy Citi’s consumer banking franchises in Indonesia, Malaysia, Thailand and Vietnam, in the most significant step yet in the US bank’s mission to shed weight and divest most of its retail operations in Asia. The deal doubles UOB’s consumer presence in four key Asean markets.
The purchase price is close to S$5 billion (US$3.7 billion): a cash consideration for the net assets of the business, which UOB says is approximately S$4 billion, and a premium on top of that, which Citi says is S$915 million.
The deal covers the retail and credit card businesses in the four jurisdictions, but not the institutional businesses. Citi chief executive Jane Fraser says the bank will use the proceeds of the sales to galvanize these.
Citi says it expects the deal to result in the release of around US$1.2 billion of allocated tangible common equity, while increasing tangible common equity by US$200 million. Citi has previously said it wants to release US$7 billion through its exit from 13 consumer franchises in Asia and the Middle East. It sold its Australian operations to National Australia Bank in August 2021, and its Philippines business to UnionBank of the Philippines in December.
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