Unionbank inks P55 billion deal to buy Citi’s PH consumer business

MANILA, Philippines — Aboitiz-led Union Bank of the Philippines signed on Thursday a deal to acquire the Philippine consumer and retail banking assets of American banking giant Citi for a total consideration of P55 billion.

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. The required equity value is about P9.7 billion as of June 30, 2021.

The transaction with Citi is expected to close in the second half of 2022. Completion is subject to regulatory approvals, the bank disclosed to the Philippine Stock Exchange (PSE) on Thursday.

To fund the acquisition, UnionBank’s board approved a P40-billion capital-raising program.

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, Unionbank disclosed to the PSE.

Erramon Isidro Aboitiz, chair of UnionBank, said: “This acquisition further cements our position as a leading bank in the Philippines, as well as fast-tracks our growth aspirations in the retail banking segment.”

Edwin R. Bautista, President and Chief Executive Officer of UnionBank, said: “Citibank Philippines has a great, profitable and well-run retail portfolio. It has the third largest credit card franchise and is a pre-eminent wealth management provider in the Philippines. We look forward to this game-changing opportunity to leapfrog our credit card business and significantly expand our banking business in the higher-end segment of the consumer market.”

Citi Head of Consumer Banking Asia Pacific and EMEA Kartik Mani said: “As we have said from day one, the priority is on securing the best results for our franchises in markets where we are refreshing our strategy and this is underlined by the fact that all related staff will be moving across to the buyer on completion. This is a positive outcome for colleagues, clients and Citi. I would also like to thank the team in the Philippines who have remained focused on clients at all times and I am confident they have a great future ahead of them.”