When Citi set out plans in April 2021 to exit retail banking in 13 markets, most of them in Asia, it caused quite a stir. But when, nine months later, the US bank said it would sell four of those consumer franchises, all of them in southeast Asia, to Singapore’s United Overseas Bank for around S$4.9 billion ($3.6 billion), no one was surprised.
The sale was one of those rare events when all the stars align. Under incoming chief executive Jane Fraser, Citi wanted to free up $1.2 billion in allocated tangible common equity, in a bid to streamline its global operations, cut costs and boost profits. It wanted buyers who would treat each of its local consumer businesses with respect, which meant retaining staff post-deal, not shedding them.
For UOB, there was ample reason to target Citi’s consumer operations in Indonesia, Malaysia, Thailand and Vietnam. But by far the most important driver was the sheer cumulative size of the assets on the table.
