Citi Announces Agreement to Sell Consumer Bank in Indonesia, Malaysia, Thailand and Vietnam to UOB Group

Rhea-AI Summary

Citi has agreed to sell its consumer banking operations in Indonesia, Malaysia, Thailand, and Vietnam to UOB Group for S$915 million (US$690 million). The transaction involves around 5,000 employees and will free up approximately US$1.2 billion of tangible common equity for Citi. This strategic shift is part of Citi's broader efforts to enhance focus on institutional banking across the Asia Pacific region and increase returns for shareholders, with estimated completion between mid-2022 and early 2024, pending regulatory approvals.

Positive

• Release of approximately US$1.2 billion of allocated tangible common equity.
• Focus on institutional banking expected to enhance growth and returns for shareholders.
• Transaction expected to raise tangible common equity by over US$200 million.

Negative

• None.

Citi Continues to Execute on Global Consumer Bank Strategic Actions

SINGAPORE--(BUSINESS WIRE)-- Citi today announced it has reached 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 these countries locally, regionally and globally.

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 S$915 million [US$690 million].

Upon closing, Citi expects the transaction to result in the release of approximately US$1.2 billion of allocated tangible common equity, as well as an increase to tangible common equity of over US$200 million. As previously announced, Citi’s exit from its consumer franchises in 13 markets across Asia Pacific and EMEA is expected to release approximately US$7 billion of allocated tangible common equity over time.

Peter Babej, Citi Asia Pacific CEO, said, "We are excited to announce this transaction with UOB, a leading pan-Asian institution. 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.”

Mark Mason, Citi CFO said, “The sale of these four consumer markets, along with our previously announced transactions, demonstrate our sense of urgency to execute our strategic refresh. We are committed to working in the best interests of our shareholders by focusing our resources on businesses that can deliver growth, as well as increasing the capital we return to shareholders over time.”

UOB was selected by Citi following an extensive and competitive auction process. Citi is committed to a seamless transaction, and during the transition to closing, there will be no change in service provided to our consumer banking and wealth customers. 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.

About Citi

Citi, the leading global bank, has approximately 200 million customer accounts and does business in more than 160 countries and jurisdictions. Citi provides consumers, corporations, governments and institutions with a broad range of financial products and services, including consumer banking and credit, corporate and investment banking, securities brokerage, transaction services, and wealth management.

Additional information may be found at www.citigroup.com | Twitter: @Citi | YouTube: www.youtube.com/citi | Blog: http://blog.citigroup.com | Facebook: www.facebook.com/citi | LinkedIn: www.linkedin.com/company/citi

Certain statements in this release are “forward-looking statements” within the meaning of the rules and regulations of the U.S. Securities and Exchange Commission (SEC). These statements are based on management’s current expectations and are subject to uncertainty and changes in circumstances. These statements are not guarantees of future results or occurrences. Actual results and capital and other financial condition may differ materially from those included in these statements due to a variety of factors.

These factors include, among others, the successful wind down and closure of these consumer banking businesses, including within the expected timeframe, macroeconomic and local market conditions, consumer preferences, and the precautionary statements included in this release. These factors also consist of those contained in Citi’s filings with the SEC, including without limitation the “Risk Factors” section of Citi’s 2020 Form 10-K. Any forward-looking statements made by or on behalf of Citi speak only as to the date they are made, and Citi does not undertake to update forward-looking statements to reflect the impact of circumstances or events that arise after the date the forward-looking statements were made.

View source version on businesswire.com: https://www.businesswire.com/news/home/20220113005931/en/

Media Enquiries:

James Griffiths

Citi Corporate Affairs, Asia Pacific

852-2868-7668

james.a.griffiths@citi.com

Investor Contact:

Jennifer Landis

212-793-2014

Jennifer.am.landis@citi.com

Source: Citi

FAQ

What is Citi's recent acquisition agreement regarding its consumer banking franchises?

Citi has agreed to sell its consumer banking franchises in Indonesia, Malaysia, Thailand, and Vietnam to UOB Group for S$915 million (US$690 million).

How many employees will transfer to UOB as part of Citi's consumer banking sale?

Approximately 5,000 consumer bank and supporting employees are expected to transfer to UOB upon closing of the transaction.

What financial impact does Citi expect from the divestiture of its consumer banking assets?

Citi expects to release approximately US$1.2 billion of allocated tangible common equity and increase tangible common equity by over US$200 million.

When is the completion of the transaction between Citi and UOB expected?

The completion of the transaction is estimated to take place between mid-2022 and early 2024, subject to regulatory approvals.

What does Citi plan to focus on following the divestiture of its consumer banking businesses?

Citi plans to concentrate on its institutional banking business in the Asia Pacific region to enhance growth and shareholder returns.