Citi completes sale of consumer business in Philippines to UnionBank

MANILA, Philippines — Global banking giant Citi has exited the retail banking landscape in the Philippines with the completion of the sale of its consumer business to Aboitiz-led Union Bank of the Philippines.

The completed sale of Citi’s Philippines’ consumer business is the second divestiture to date among the 14 consumer markets in Asia, Europe, Middle East and Mexico that Citi intends to exit as part of its strategy refresh.

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.

The transaction is expected to result in a capital benefit of approximately $700 million.

Titi Cole, CEO of Legacy Franchises at Citi, said the transaction was another milestone for the bank’s strategic refresh.

“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 are very pleased with today’s announcement, and we will use the capital generated to invest in our strategic priorities,” Cole said.

The transaction covers the local credit card, unsecured lending, deposit and investment businesses of Citi, as well as Citicorp Financial Services and Insurance Brokerage Philippines Inc. (CFSI), which provides insurance and investment products and services to retail customers.

UnionBank absorbed approximately 1,540 Citi consumer bank and supporting employees.

Citi Philippine CEO Aftab Ahmed said the transaction represents a positive outcome for clients, colleagues, and the company.

“Citi will continue to serve institutional clients in the Philippines and across our global network as we have for over 120 years,” Ahmed said.

Citi Philippines’ institutional business provides a comprehensive range of services to over 950 multinational corporations, as well as leading local corporates, including 90 percent of the top 20 companies by market capitalization on the Philippine Stock Exchange.

The total cash consideration is based on the net assets of the Citi Philippines consumer banking business plus a premium of P45.3 billion. Based on the closing statement as of end-June, the net asset value of the business stood at P26.7 billion.

UnionBank chief customer experience officer and chief digital channel officer Ana Delgado said the acquisition accelerates the bank’s goal of becoming the great consumer bank in the Philippines with one of the most diversified consumer banking portfolios among the listed banks.

“With the acquisition of the Citi consumer business, we are now strong across three consumer businesses, namely: credit cards, salary/personal loans and mortgage loans,” Delgado said.

Delgado said the synergies across both organizations would allow the bank to unlock tremendous value by enriching customer proposition and elevating customer engagement.