The subsidiaries of Singapore-headquartered United Overseas Bank (UOB) have agreed to acquire Citigroup’s consumer banking businesses in Indonesia, Malaysia, Thailand and Vietnam.
The operations include wealth management, unsecured and secured lending portfolios, and retail deposit arms.
The total cash consideration of the deal will be calculated on “an aggregate premium equivalent to S$915m (£497m, $676m, €596m) plus the net asset value of the consumer business as at completion”, UOB said.
Citigroup’s consumer business in the four markets had an aggregate net asset value of around S$4bn and 2.4 million customers, as of 30 June 2021.
Completion will be subject to regulatory approvals in Singapore and in each country where the businesses are based. As a result, UOB expects the deal to finalise between mid-2022 and early 2024, depending on the “progress and outcome of the regulatory approval process”, it said.
Wee Ee Cheong, deputy chairman and chief executive of UOB, said: “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.
“UOB believes in southeast Asia’s long-term potential and we have been disciplined, selective and patient in seeking the right opportunities to grow. Subject to regulatory approval, we look forward to integrating Citigroup’s quality portfolio and welcoming its team, and to creating value for our enlarged base of customers, employees and other stakeholders.
“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.”
Peter Babej, Citi Asia Pacific chief executive, added: “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.”