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Citigroup sells retail operations in Southeast Asia for $3.7 billion

By Yashasvini on Jan 15, 2022 | 04:35 AM IST

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• The NY-based bank will sell its businesses in Indonesia, Malaysia, Thailand and Vietnam to United Overseas Bank

• UOB will pay Citigroup a cash consideration for the net assets of the acquired businesses plus a premium of nearly $690 million

Citigroup Inc (NYSE: C) would be selling its consumer business in four Southeast Asian markets to United Overseas Bank (UOB) for about $3.7 billion after the U.S. bank planned to exit its retail operations in 13 markets.

UOB will pay Citigroup a cash consideration for the net assets of the acquired businesses plus a premium of nearly $690 million, Citigroup said Thursday 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. 

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UOB, Southeast Asia's third-largest bank, will acquire Citi's unsecured and secured lending portfolios, wealth management and retail deposit businesses in the four countries. This includes 24 branches.

Fraser’s thirteen sales

In September 2020, Jane Fraser took over Citi September 2020, becoming the first woman to become chief executive of a Wall Street bank. 

Under CEO Fraser, Citigroup has intended to dispose of its retail banking operations in 13 different countries across Asia and Europe and instead focus on building out its wealth management arm. 

In a statement given last year, Fraser said, “As a result of the ongoing refresh of our strategy, we have decided that we are going to double down on wealth. We will operate our consumer banking franchise in Asia and EMEA solely from four wealth centres, Singapore, Hong Kong, UAE and London." 

She added that while the other 13 markets have excellent businesses, they didn't have the scale to compete. “We believe our capital, investment dollars and other resources are better deployed against higher returning opportunities in wealth management and our institutional businesses in Asia,” she added.

This week, the firm announced it would also seek to exit its consumer, small business and middle market banking businesses in Mexico. Fraser is focused on simplifying the bank’s operations in New York.

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With inputs from Bloomberg  

Picture Credits: Reuters

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