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    Citigroup closes more Asian retail banking business with $ 3.7 billion in transactions

    Citigroup Ltd

    Retail banking franchise in Indonesia, Malaysia, Thailand and Vietnam

    United Overseas Bank Ltd

    , Is pursuing a strategy of ending most of its retail operations in Asia and freeing up resources to deploy in asset management and servicing corporate clients.

    A New York-based bank said Thursday that the transaction would include retail banking and credit card businesses. Singapore-based UOB will pay Citigroup $ 690 million in premiums in addition to the net worth of the business it acquires, Citigroup said.

    According to the UOB, net worth is about S $ 4 billion as of June 2021, or $ 3 billion, and it will have about 2.4 million customers. Fluctuations in the company’s net worth may cause fluctuations in the final sale price.

    Through this transaction, Citigroup said it will focus on areas that include an organizational network in the Asia Pacific region. December Citigroup agreed Sold retail banking business Similar deals have been reached with local lenders in the Philippines and previously in Australia. We have chosen to reduce our business in South Korea.

    Mark Mason, Citigroup’s Chief Financial Officer, said:

    In an internal note to staff, Peter Babej, CEO of the bank’s Asia Pacific region, said the UOB was chosen because of its strong culture and regional ambitions. According to a note seen by The Wall Street Journal, he said the deal followed a “massive auction process.”

    Founded in 1935, UOB, Singapore’s third-largest bank by market value, is expanding its footprint throughout the region.

    UOB seeks to take advantage of Southeast Asia’s wealth growth through this transaction. This will nearly double the retail customer base in these four countries, bringing the total to over 5 million. Lee Wai Fai, UOB’s chief financial officer, said at the briefing that Singapore remains a major market.

    Citigroup said the transaction is expected to release approximately $ 1.2 billion of allotted tangible common stock and increase tangible common stock by more than $ 200 million.

    Citigroup, the third largest US bank in assets, has extensive retail banking throughout the Asia-Pacific region, in addition to investment banking and full-fledged institutional business ranging from corporate lending to cash. It is the only US company with a network. Management and trade finance.

    Bank Said last April Withdraw from retail operations in 13 markets, 10 of which are in the Asia Pacific region, to focus resources on wealth management and institutional business. According to Citigroup, these sales are expected to release approximately $ 7 billion of allotted tangible common stock in the long run.

    In addition, Citigroup is in talks to sell its consumer franchise in the remaining six markets (Taiwan, India, Mainland China, Poland, Russia and Bahrain).

    We hold consumer banking licenses in all markets where Citigroup sells retail franchises. This is also necessary to run the business of local institutional investors. This means that bidders need to have an existing license to undertake these tasks, effectively eliminating new entrants to the market.

    Citigroup earlier this week Said to finish Mexican consumers, small businesses, middle market banks.

    Citigroup said it expects the latest Southeast Asian sale to rely on obtaining regulatory approval in each country. The bank expects approximately 5,000 staff to be transferred to UOB and the transaction to be completed from mid-2022 to early 2024.

    Write in Dave Sebastian And in Jinyang

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    Citigroup closes more Asian retail banking business with $ 3.7 billion in transactions

    Source link Citigroup closes more Asian retail banking business with $ 3.7 billion in transactions

    The post Citigroup closes more Asian retail banking business with $ 3.7 billion in transactions appeared first on Eminetra.

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