UnionBank acquisition of Citi consumer banking a done deal
Aboitiz-led UnionBank of the Philippines (UnionBank) said it completed Monday, Aug. 1, its P45.3 billion acquisition of Citi Philippines consumer banking business in the country.
In a statement, UnionBank President and CEO Edwin R. Bautista, said the done deal is a "game changer" for the Philippines’ seventh biggest bank.
“We are now a much larger consumer bank. We added a consumer portfolio that is well-run and very profitable. This will provide us better margins and allow us to maintain our industry-leading ROE (return on equity) moving forward,” said Bautista.
UnionBank absorbed Citi’s 1,540 employees. Bautista has said earlier that with the Citi consumer portfolio, they will become one of the three biggest credit cards issuers in the Philippines.
UnionBank acquired Citi's retail banking business in the country via an asset and liability transfer of its consumer banking activities. The transaction also involved the sale of the shares in Citicorp Financial Services and Insurance Brokerage Philippines and the real estate shares in Citibank Square building in Eastwood, Quezon City.
The bank stated that the total cash consideration is based on the net assets of Citi’s consumer banking business plus a premium of P45.3 billion. Based on the closing statement as of June 30, 2022, the net asset value of the business was at P26.7 billion, according to UnionBank.
In a separate statement, Citi said the transaction completion will enable the US bank to a “strategy refresh” in the Philippines since it is expected to result in a “capital benefit of approximately $700 million” for Citi which it will invest for its strategic priorities.
“This transaction represents a positive outcome for our clients, our colleagues and our firm,” said Citi Philippines CEO, Aftab Ahmed.
Citigroup is divesting its 14 consumer markets in Asia, Europe, Middle East and Mexico. The US bank has already signed nine sale deals across the these markets.