SUBSIDIARIES of United Overseas Bank Ltd’s (UOB) have inked agreements to acquire Citigroup’s consumer banking businesses comprising unsecured and secured lending portfolios, wealth management and retail deposit businesses (consumer business) in Indonesia, Malaysia, Thailand and Vietnam.
The proposed acquisition will further strengthen and deepen UOB’s ASEAN franchise.
Citigroup’s consumer business had an aggregate net asset value of circa S$4 bil and a customer base of about 2.4 mil as of June 30, 2021. It generated income of circa S$500 mil in 1H 2021.
Completion of the acquisition in each country will be conditional on obtaining regulatory approvals relevant to each country and in Singapore. 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.
Citigroup will assist UOB and its subsidiaries (the UOB Group) with the migration of the customers and employees of its consumer business to ensure a smooth transition.
“The acquisition of Citigroup’s retail business in our key markets of Indonesia, Malaysia, Thailand and Vietnam is a great opportunity that comes at the right time,” commented UOB’s deputy chairman and CEO Wee Ee Cheong.
“UOB believes in Southeast Asia’s long-term potential and we have been disciplined, selective and patient in seeking the right opportunities to grow.”
The acquired business together with UOB’s regional consumer franchise will form a powerful combination that will scale up UOB Group’s business and advance our position as a leading regional bank, according to Wee.
Meanwhile, Citi Asia Pacific CEO Peter Babej expressed confidence over the transaction with UOB which it described as “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,” he pointed out.
“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.”
UOB’s retail strategy includes tapping the rising affluence in Southeast Asia, acquiring and serving customers through its digital banking platform, UOB TMRW, and meeting financial needs through its omni-channel approach as it moves up the wealth continuum. – Jan 14, 2022
