UnionBank completes takeover of Citi PH’s retail business
With the key acquisition, UnionBank becomes one of the top issuers of credit cards in the Philippines. —INQUIRER FILE PHOTO
Aboitiz-led UnionBank of the Philippines completed on Monday the P72-billion takeover of Citi’s Philippine assets as it prepares to take on larger rivals in the competitive consumer segment.
UnionBank, the country’s seventh-largest publicly listed lender, said on Monday the acquisition makes it among the “top three credit cards issuers in terms of usage and spends.”
“I cannot over emphasize how this is a game changer for UnionBank, its customers and its employees. We are now a much larger consumer bank,” Edwin Bautista, president and CEO of UnionBank, said in a statement.
“We added a consumer portfolio that is well-run and very profitable. This will provide us better margins and allow us to maintain our industry-leading [return on equity] moving forward,” he added.
UnionBank is paying about $1.3 billion for the acquisition, larger than the previous estimate of about $1 billion.
Total cash consideration was based on the net assets of the Citi Philippines consumer banking business, plus a premium of P45.3 billion, the statement showed. At the end of June this year, Citi had net assets of P26.7 billion.
Asset, liability transfer
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 the real estate shares in Citibank Square building in Eastwood, Quezon City.
Bautista said more than 1,500 employees from Citi Philippines will join UnionBank.
“This further deepens our leadership bench. I am confident that, together, we will be able to bring the best customer experience and serve many more market segments and communities through innovation and collaboration,” he said.
Meanwhile, UnionBank chief customer experience officer and chief digital officer Ana Delgado said the deal accelerates its goal of building the “greatest consumer bank in the Philippines.”
“We are now strong across three consumer businesses, namely: credit cards, salary/personal loans and mortgage loans,” Delgado explained.
She said the bank has set up a dedicated integration team for the takeover.
“As we work to bring new and exciting products and services to our customers, we are committed to ensuring that the same level of experience will continue for the 1 million customers that are moving to UnionBank,” she said.
In an earlier advisory to customers, Bautista said the full integration of UnionBank and Citi would be completed by the middle of 2023.
