Unionbank bags Citi’s $1 billion retail business in Philippines

MANILA, Philippines — Aboitiz-led Union Bank of the Philippines has acquired the consumer and retail banking assets of global banking giant Citigroup in the Philippines.

A highly placed source told The STAR the deal, worth about $1 billion, is expected to be signed in the next two to three weeks.

The digitally advanced Unionbank edged some of the country’s largest lenders in the race for Citi’s consumer banking business in the Philippines.

The source added the “match made in heaven” transaction is expected to be completed in the second quarter next year.

In a disclosure to the Philippine Stock Exchange, Unionbank confirmed a report by Bloomberg that named it as the preferred bidder for Citi’s retail banking business in Manila.

“The bank confirms that it is in discussions with Citigroup with respect to a potential acquisition of Citi’s consumer banking business in the Philippines,” Unionbank general counsel and corporate secretary Joselito Banaag said.

“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,” he said.

The source pointed out that Unionbank edged the other bidders as it has been investing heavily in technology over the past few years as part of its digitalization journey.

The source also revealed the Aboitiz-led bank presented a plan that also covers the 1,800 employees of Citi’s retail and consumer banking segment in the country.

According to the source, the plan is good for the banking industry and the country as the workforce of Citi’s retail and consumer banking segment will be retained.

UnionBank and Citi’s retail business, the source said, is a perfect combination as both banks are digitally advanced. The Aboitiz-led bank is strong in mortgage, while Citi’s strength is in the credit card segment.

UnionBank is the country’s 10th largest lender in terms of assets with P646.07 billion as of end-June. It ranked seventh in terms of capital with P105.58 billion and fourth in terms of return on equity with 16.63 percent.

The bank also ranked 10th in terms of deposits and net loans with P439.99 billion and P280.87, respectively.

Last April, Citi announced it was exiting the retail banking landscape in the Philippines and 12 other markets in Asia as well as the Europe, Middle East and Africa (EMEA) region that contributed $4.2 billion in revenue last year.

The American banking giant decided to focus its global consumer bank presence in Singapore, Hong Kong, United Arab Emirates and London.

Citi is the largest foreign bank in the Philippines and ranked 12th overall in terms of assets with P352.97 billion as of end-June. It ranked 14th in terms of capital with P19.13 billion.