Singapore’s UOB wins bid for assets of Citibank in Thailand, Indonesia, Malaysia, and Vietnam

[PeteC]

https://www.thaienquirer.com/36525/sing ... d-vietnam/

Singapore-based United Overseas Bank (UOB) announced on Friday that it has won the bid for Citibank’s retail banking sector in Thailand, Indonesia, Malaysia, and Vietnam.

In an early morning announcement to the Singapore Stock Exchange (SGX), UOB said that would buy out the assets.

“United Overseas Bank Limited (UOB)’s subsidiaries have entered into agreements to acquire Citigroup’s consumer banking businesses comprising its unsecured and secured lending portfolios, wealth management and retail deposit businesses (the Consumer Business) in Indonesia, Malaysia, Thailand and Vietnam (the Proposed Acquisition),” UOB said in a statement to the SGX.

The regional banking giant, UOB, said that as part of the proposed acquisition, UOB intends to bring onboard the employees in the consumer business.

UOB’s bid was viewed by analysts as the most comprehensive of the bids, UOB was looking to acquire assets all of Citibank’s assets in what UOB views as key markets in ASEAN while other banks were bidding for bits and pieces in different markets.

“Positive in my view, package deal to expand ASEAN, roughly double their client base in ASEAN, particularly in the mass affluent segment – which is where UOB is strongest. SG$5 billion deal is at 1.2x PB. Income accretive immediately, but likely to see full impact 2H2023 once integration is done. No risk of capital raising. Enough internal excess capital to pay for this and not a material impact on CET1,” said banking analyst at Maybank Kim Eng Securities.

Citibank said in a statement said “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].”

The other bidders for the Thai operations were local giant Bangkok Bank Plc., the newly merged Thanachart TMB Bank Plc (TTB), Bank of Ayudhaya Plc (BAY), apart from Singapore-based United Overseas Bank Plc (UOB).

UOB was among the only banks that had bid for assets in a few countries.

“This transaction represents a positive outcome for our clients, our colleagues and our firm. 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,” Tibor Pandi, Country Head, Citi (Thailand) said.

He added that Thailand remains a key market for Citi globally and that Citibank remains committed and focused on serving institutional clients locally, regionally, and globally.