UnionBank of the Philippines has signed the share and business transfer agreement that infuses into its portfolio Citigroup Inc.’s consumer banking business in the Philippines.
UnionBank said it is buying the asset with a P45 billion premium over the business’ net worth in a transaction.
“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, 3 full service bank branches, 5 wealth centers, and 2 bank branch lites,” the Aboitiz-led lender said.
As of end-June, Citi’s consumer banking business had an asset of P89.5 billion including gross loans of P59.7 billion, liabilities of P71.7 billion including deposits of P67.8 billion, assets under management (AUM) of P95 billion, and a customer base of close to 1 million.
“The transaction will be effected via (i) an asset and liability transfer of the consumer banking activities of Citibank, N.A., Philippines Branch, (ii) the sale of the shares in Citicorp Financial Services and Insurance Brokerage Philippines Inc., and (iii) and the sale of Citibank Square building,” UnionBank said.
UnionBank will pay the transaction a cash consideration “based on the net assets of the Citi Philippines consumer business plus a premium of P45.3 billion.”
“Based on the anticipated increase in risk-weighted assets, the required equity is approximately P9.7 billion as of 30 June 2021,” it said.
The transaction, set to be closed by the second half of next year, will be financed via a combination of internal resources and a stock rights offering , UnionBank said.
