Citi Announces Agreement to Sell Philippines Consumer Bank to UnionBank of the Philippines
Citi today announced it has reached agreement with UnionBank of the Philippines (hereafter “UnionBank”) on the acquisition of Citi’s consumer banking franchise in the Philippines. The transaction covers Citi’s local credit card, unsecured lending, deposit and investment businesses, as well as Citicorp Financial Services and Insurance Brokerage Philippines Inc. (CFSI), which provides insurance and investment products and services to retail customers. The agreement covers all related Citi staff, with approximately 1,750 consumer bank and supporting employees expected to transfer to UnionBank upon close of the transaction. UnionBank will pay Citi cash consideration for the net assets of the acquired businesses (subject to customary closing adjustments) plus a premium of PHP45.3 billion (approximately US$908 million).
Upon closing, Citi expects this transaction to result in the release of approximately $300 million of allocated tangible common equity, as well as an increase to tangible common equity of approximately $500 million. As previously announced, Citi’s exit from its consumer franchises in 13 markets across Asia and EMEA is expected to release approximately $7 billion of allocated tangible common equity over time.
Peter Babej, Citi Asia Pacific CEO, said: “This transaction represents a positive outcome for our clients, our colleagues and our firm. We are delivering on our renewed strategy, focusing resources in areas where our global network positions us to deliver optimal growth and returns. Citi will continue to serve institutional clients in the Philippines and across Asia Pacific as we have for over a century. We are very pleased with today’s announcement, and we will use the capital generated to invest in our strategic priorities.”
Citi Philippines’ institutional business provides a comprehensive range of services to over 950 multinational corporations as well as leading local corporates, including 90% of the top 20 companies by market capitalization on the Philippine Stock Exchange.
UnionBank 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. Subject to the timing of regulatory approvals, completion is expected in the second half of 2022.
Citi’s Banking, Capital Markets and Advisory Group is acting as exclusive financial advisor to Citi in respect of the transaction; Linklaters LLP and SyCip Salazar Hernandez & Gatmaitan are acting as Citi’s international and domestic legal advisors.
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