Citigroup Inc on Thursday agreed to sell consumer-banking businesses in Indonesia, Malaysia, Thailand and Vietnam to United Overseas Bank (UOB) Ltd for about S$4.9 billion (US$3.6 billion) as Citigroup chief executive officer Jane Fraser continues her push to simplify the New York-based bank.
United Overseas Bank is to pay Citigroup a cash consideration for the net assets of the acquired businesses, plus a premium of S$915 million, Citigroup said in a statement.
The transaction includes Citigroup’s retail banking and credit card businesses in all four countries, but excludes its institutional offerings.
“We are confident that UOB, with its strong culture and broad regional ambitions, will provide excellent opportunities and a long-term home for our consumer banking colleagues in Indonesia, Malaysia, Thailand and Vietnam,” Peter Babej, who oversees Citigroup’s business in Asia, said in the statement. “Focusing our business through these actions will facilitate additional investment in our strategic focus areas, including our institutional network across Asia Pacific, driving optimal returns for Citi.”
The deal would give United Overseas Bank, Southeast Asia’s third-largest lender, a greater foothold in the region.
Citigroup expects roughly 5,000 employees to transfer to United Overseas Bank after the deal closes, the statement said.
Under Fraser, Citigroup has sought to dispose of its retail banking operations in 13 countries across Asia and Europe and instead focus on building out its burgeoning wealth management arm.
This week, the firm announced that it would also seek to exit its consumer, small-business and middle-market banking businesses in Mexico.
Citigroup announced a deal to sell the first of those 13 markets in August, when it said that National Australia Bank Ltd would pick up its unit in Australia.
In November, the firm warned that it would take charges of US$1.2 billion to US$1.5 billion as it winds down retail operations in South Korea.
Last month, Union Bank of the Philippines agreed to buy the assets in that country.
“The sale of these four consumer markets, along with our previously announced transactions, demonstrate our sense of urgency to execute our strategic refresh,” Citi chief financial officer Mark Mason said in the statement. “We are committed to working in the best interests of our shareholders by focusing our resources on businesses that can deliver growth, as well as increasing the capital we return to shareholders over time.”
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