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Citigroup Continues Pivot From Select Retail Markets
Tom Burroughes
1 August 2022
Citigroup has completed its sale of its Philippines consumer business to UnionBank of the Philippines, part of a series of moves by the US lender to offload retail operations in a number of countries and pivot to areas such as wealth management. The bank expects to realise about $700 million of capital from the deal. This was partially offset by a slowdown in investment banking activity as well as investment fee headwinds in global wealth management
The transaction covers Citigroup’s local credit card, unsecured lending, deposit and investment businesses, as well as Citicorp Financial Services and Insurance Brokerage Philippines Inc, which provides insurance and investment products and services to retail customers.
The agreement covers related Citigroup staff, with about 1,540 consumer bank and supporting employees transferring to UnionBank, Citigroup said in a statement today.
This is the second divestiture to date among the 14 consumer markets in Asia, Europe, Middle East and Mexico that Citigroup intends to exit as part of its strategy refresh. To date, the bank has signed deals for the sale of nine of these markets, including the previously-announced completion of Australia and is in the process of winding down consumer banking in South Korea.
“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,” Citi's chief executive of legacy franchises, Titi Cole, said.
As reported a fortnight ago, Citigroup's second-quarter results showed that revenue rose by a better-than-expected 11 per cent from the prior-year period, driven by increased rates, client activity in markets and continued momentum in the US cards businesses.