UnionBank of the Philippines (UnionBank) entered on a deal to acquire the consumer banking assets of Citigroup Inc. (Citi). The transaction includes Citi’s credit card, personal loans, wealth management, and retail deposit businesses.
The acquisition also includes Citi’s real estate interests in relation to Citibank Square in Eastwood, three full-service bank branches, five wealth centers, and two bank branch lites.
The Aboitiz-led UnionBank will pay cash consideration for the net assets of the Citi Philippines consumer business (subject to customary closing adjustments) plus a premium of P45.3 billion. Based on the anticipated increase in risk-weighted assets, the required equity is approximately P9.7 billion as of June 30, 2021. The acquisition is expected to be financed via a combination of internal resources and a stock rights offering (SRO).
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The transaction with Citi is expected to close in the second half of 2022. Completion is subject to regulatory approvals, including from the Monetary Board of the Bangko Sentral ng Pilipinas, Philippine Competition Commission, Philippine Deposit Insurance Corporation, Securities and Exchange Commission, and Insurance Commission.
As of June 30, 2021, Citi’s consumer banking business has total assets of P89.5 billion including gross loans of P59.7 billion, total liabilities of P71.7 billion including deposits of P67.8 billion, investment AUM of P95 billion, and a customer base of close to 1 million.
The transaction will be effected via an asset and liability transfer of the consumer banking activities of Citibank, N.A., Philippines Branch, the sale of the shares in Citicorp Financial Services and Insurance Brokerage Philippines Inc., and the sale of Citibank Square building.
Approximately 1,750 Citi employees, including senior management, are expected to join UnionBank.
Citi will continue to operate its consumer banking business in the Philippines until the completion of the acquisition. All consumer banking operations, including call centers, Citibank online, and mobile banking services, will continue to serve Citi’s customers as usual.
Citi will continue to operate its institutional business in the Philippines.