UnionBank outperforms PSEi as investors cheer talks with Citi

Ramon Royandoyan - Philstar.com
UnionBank outperforms PSEi as investors cheer talks with Citi
In a disclosure to the Philippine Stock Exchange on Thursday, the Aboitiz-run bank confirmed it is indeed in talks with American banking giant to bid and potentially acquire the latter’s consumer banking business in the Philippines.
UnionBank / Released

MANILA, Philippines — Shares in Union Bank of the Philippines jumped on Thursday after the Aboitiz-led lender confirmed news it is in talks with Citigroup Inc. for a potential takeover of the American banking giant’s consumer banking business in the Philippines.

UnionBank rallied 6.42% to close at P111 each, outperforming 1.23% gains of the Philippine Stock Exchange index (PSEi).

UnionBank’s stocks sizzled after it confirmed a report from Bloomberg that it is in “discussions” to acquire Citi’s consumer banking assets in the Philippines, although the company clarified that negotiations are still “at a preliminary stage”.

“Any transaction in relation to the foregoing would be subject to, among other things, the completion of satisfactory due diligence, the negotiation and execution of definitive transaction documents, satisfaction of the conditions contained therein and the approval by the regulators of the transaction,” UnionBank said.

“Accordingly, there can be no assurances that the transaction will be completed at this stage,” the company added.

Citi earlier announced it would send its consumer banking venture around various locales, including the Philippines, to the auction block as it restructures to focus on its investment banking and wealth management businesses in markets like Hong Kong, Britain, Singapore, and the United Arab Emirates.

Most of the markets being exited are in Asia, where Citigroup's global consumer banking business at the end of 2020 had $6.5 billion in revenues and $123.9 billion in deposits. The other markets affected by the decision are: Australia, Bahrain, Indonesia, South Korea, Malaysia, Poland, Russia, Taiwan, Thailand and Vietnam.

Apart from UnionBank, Citi’s offer also caught the attention of other big lenders in the country such as BDO Unibank, Metropolitan Bank & Trust Co. and Bank of the Philippine Islands, Bloomberg reported in October. But in a new report, Bloomberg said Citi picked UnionBank as its “preferred bidder”.

As it stands, UnionBank has made waves in the banking scene amid the pandemic after it secured a digital banking license from the Bangko Sentral ng Pilipinas. Corporate regulators recently approved the incorporation of UnionBank’s digital banking arm

UnionBank saw its earnings surge 26% year-on-year in the first three quarters of 2021 to P10.7 billion on the back of strong topline growth and lesser provisions for potential loan defaults. — with a report from AFP

  • Latest
  • Trending
Are you sure you want to log out?

Philstar.com is one of the most vibrant, opinionated, discerning communities of readers on cyberspace. With your meaningful insights, help shape the stories that can shape the country. Sign up now!

or sign in with