Union Bank of the Philippines said Monday it completed the acquisition of Citi’s consumer banking business in the Philippines for P72 billion.
The total cash consideration was based on the net assets of the Citi Philippines consumer banking business, plus a premium of P45.3 billion. Based on the closing statement as of June 30, 2022, the net asset value of the business was P26.7 billion.
UnionBank president and chief executive Edwin Bautista said in a statement that with the acquisition, the bank added a consumer portfolio that is well-run and very profitable.
“I cannot overemphasize how this is a game changer for UnionBank, its customers and its employees. We are now a much larger consumer bank. This will provide us better margins and allow us to maintain our industry-leading ROE [return on equity] moving forward,” Bautista said.
Bautista said more than 1,500 top talents from Citi, including senior management team, would 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,” Bautista said.
UnionBank chief customer experience officer and chief digital channel officer Ana Delgado said the acquisition accelerated the bank’s goal of becoming the top consumer bank in the Philippines with one of the most diversified consumer banking portfolios among the listed banks.
“With the acquisition of the Citi consumer business, we are now strong across three consumer businesses, namely: credit cards, salary / personal loans and mortgage loans,” Delgado said.
She said the synergies across both organizations would allow the bank to unlock tremendous value by enriching customer proposition and elevating customer engagement.
“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 one million customers that are moving to UnionBank. To deliver on this commitment, we have set up a dedicated integration team and are working closely with Citi to ensure a smooth transition,” Delgado said.
UnionBank said that with the Citi consumer portfolio, it would become part of the top three credit cards issuers in terms of usage and spends.
The transaction will take effect 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.
Citi chief executive of legacy franchises Titi Cole said the transaction was another milestone for the bank’s strategic refresh.
“The sale marks the second completed divestiture and underlines the progress we continue to make. UnionBank is the optimal owner for our local consumer business and we wish our former employees and customers continued success in the future. We are very pleased with today’s announcement, and we will use the capital generated to invest in our strategic priorities,” he said.
Citi Philippines chief executive Aftab Ahmed said Citi would continue to serve institutional clients in the Philippines and across its global network. Citi Philippines’ institutional business provides a comprehensive range of services to over 950 multinational corporations as well as leading local corporates, including 90 percent of the top 20 companies by market capitalization on the Philippine Stock Exchange.