UOB acquires Citi's consumer business in four Asean countries for over $5 billion

UOB acquires Citi's consumer business in four Asean countries for over $5 billion

UOB has agreed to acquire Citigroup's consumer banking operations in Indonesia, Malaysia, Thailand, and Vietnam, including its unsecured and secured loan portfolios, wealth management, and retail deposit businesses.

UOB would pay a cash consideration of S$915 million for the proposed acquisition, plus the net asset value of Citi's consumer business as of the transaction's completion date, the bank said in a bourse filing on Friday (Jan 14).

As of June 30, 2021, the consumer company has an aggregate net asset worth of around S$4 billion and a client base of approximately 2.4 million. It earned around S$500 million in revenue in the first half of 2021.
UOB said that the transaction would strengthen its partner ecosystem and is projected to treble the bank's current retail customer base in the four regions, putting the bank five years ahead of schedule.

Wee Ee Chong, vice chairman and chief executive officer of UOB, said that the transaction would "create a formidable combination."

"UOB believes in the long-term potential of Southeast Asia, and we have been rigorous, selective, and patient in identifying the proper growth prospects," he said.
UOB anticipates completing the transaction between mid-2022 and early 2024, subject to regulatory clearances in each nation and in Singapore.

Regarding the personnel, UOB said that it intends to integrate the consumer business's employees as part of the transaction.

Citi's consumer business employs around 5,000 people, including senior management. UOB said that the workforce move would bolster its bench strength and enable the company to capitalize on business synergies.

Almost certainly, the transaction will be funded by extra money.

UOB anticipates that the merger will instantly boost profits per share and return on equity, excluding one-off transactions. Additionally, depending on its capital position as of September 30, 2021, the purchase should lower its Common Equity Tier 1 ratio by 70 basis points to 12.8 percent.

Credit Suisse (Singapore) is advising UOB on the transaction, while Allen & Overy LLP (Singapore) is advising on legal matters.

UOB's shares ended Thursday at S$29.18, down S$0.26 or 0.9 percent.


Akhyari Hananto

I began my career in the banking industry in 1997, and stayed approx 6 years in it. This industry boost his knowledge about the economic condition in Indonesia, both macro and micro, and how to More understand it. My banking career continued in Yogyakarta when I joined in a program funded by the Asian Development Bank (ADB),as the coordinator for a program aimed to help improve the quality of learning and teaching process in private universities in Yogyakarta. When the earthquake stroke Yogyakarta, I chose to join an international NGO working in the area of ?disaster response and management, which allows me to help rebuild the city, as well as other disaster-stricken area in Indonesia. I went on to become the coordinator for emergency response in the Asia Pacific region. Then I was assigned for 1 year in Cambodia, as a country coordinator mostly to deliver developmental programs (water and sanitation, education, livelihood). In 2009, he continued his career as a protocol and HR officer at the U.S. Consulate General in Surabaya, and two years later I joined the Political and Economic Section until now, where i have to deal with extensive range of people and government officials, as well as private and government institution troughout eastern Indonesia. I am the founder and Editor-in-Chief in Good News From Indonesia (GNFI), a growing and influential social media movement, and was selected as one of The Most Influential Netizen 2011 by The Marketeers magazine. I also wrote a book on "Fundamentals of Disaster Management in 2007"?, "Good News From Indonesia : Beragam Prestasi Anak Bangsa di dunia"? which was luanched in August 2013, and "Indonesia Bersyukur"? which is launched in Sept 2013. In 2014, 3 books were released in which i was one of the writer; "Indonesia Pelangi Dunia"?, "Indonesia The Untold Stories"? and "Growing! Meretas Jalan Kejayaan" I give lectures to students in lectures nationwide, sharing on full range of issues, from economy, to diplomacy Less
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