CITIGROUP, INC. has completed the sale of its Philippine consumer banking business to UnionBank of the Philippines, Inc. (UnionBank), it said on Monday.
The transaction covers Citi’s credit card, unsecured lending, deposit and investment businesses, as well as Citicorp Financial Services and Insurance Brokerage Philippines Inc., which provides insurance and investment products and services to its retail clients.
“The agreement covers related Citi staff, with approximately 1,540 consumer bank and supporting employees transferring to UnionBank,” the foreign bank said in a statement.
It said the transaction is expected to result in a capital benefit of about $700 million for Citi.
Citi will continue to maintain a corporate banking presence in the Philippines.
“The sale marks the second completed divestiture and underlines the progress we continue to make. UnionBank is the optimal owner for our local consumer business and we wish our former employees and customers continued success in the future… [We] will use the capital generated to invest in our strategic priorities,” Citi Chief Executive Officer (CEO) of Legacy Franchises Titi Cole said.
“This transaction represents a positive outcome for our clients, our colleagues and our firm. Citi will continue to serve institutional clients in the Philippines and across our global network as we have for over 120 years,” Citi Philippines CEO Aftab Ahmed said.
UnionBank’s acquisition of Citi’s local consumer unit, priced at P55 billion, was announced in December 2021.
Citi’s departure from the Philippine retail banking space was announced in April 2021 as part of the banking giant’s strategic refresh. Apart from the Philippines, the lender said it will also exit its consumer banking businesses in Australia, Bahrain, China, India, Indonesia, South Korea, Malaysia, Poland, Russia, Taiwan, Thailand and Vietnam.
“To date, the bank has signed deals for the sale of nine of these markets, including the previously announced completion of Australia and is in the process of winding down consumer banking in South Korea,” Citi said on Monday.
It will continue to offer consumer banking in Hong Kong, Singapore, London and the United Arab Emirates, the bank’s four wealth hubs.
UnionBank’s shares declined by P2.70 or 3.35% to close at P78 each on Monday. — BVR