UnionBank of the Philippines announced today that it has
entered into a Share and Business Transfer Agreement with various subsidiaries
of Citigroup Inc. (Citi) to acquire Citi’s consumer banking business in the
Philippines. 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. Erramon
Isidro M. Aboitiz, Chairman 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, highlighted that,
“Citibank Philippines has a great, profitable and well-run retail portfolio.
It
has the 3rd largest credit card franchise and is a pre-eminent wealth
management provider in the Philippines. We look forward to this gamechanging
opportunity to leapfrog our credit card business and significantly expand our
banking business in the higher end segment of the consumer market.” Mr.
Bautista added, “There are clear synergistic opportunities in this engagement.
We intend to learn from Citi’s expertise to enable UnionBank to effectively build
on its success and take the business to the next level. As we embark on this
journey, we are committed to retain all of Citi’s key talents and uphold the
superior customer experience that Citi has delivered to its customers over the
years.” Approximately 1,750 Citi employees, including senior management, are
expected to join UnionBank. Mr. Aboitiz added, “We are looking forward to
welcoming all employees to the UnionBank family.
With the strong cultural
similarities between the organizations, we believe Citi’s employees will feel
at home at UnionBank.” UnionBank is the 7th largest publicly-listed bank in the
Philippines and widely recognized to be the leading digitally transformed and
most innovative bank in the industry.
Union Bank of the Philippines (UnionBank)
has always been among the first to embrace technological innovations to empower
its customers. It embraces the future of banking and is committed to be the
Philippines’ leading digitally-transformed bank to best serve the growing needs
of Filipinos everywhere. It has consistently been recognized as of one of
Asia’s leading companies, ranking among the country’s top universal banks in
terms of profitability and efficiency.
Over the years, UnionBank has garnered a
record-breaking number of awards and recognition including: "Asia
Trailblazer Institution of the Year" from Retail Banker International;
"Best Bank Transformation in South East Asia 2021" from Global
Banking and Finance; "Best Bank for Customer Experience in South East Asia
2021" from Global Brands Magazine; 4-Time "Digital Bank of the Year
(2018-2021)" from The Asset Triple A; "Most Recommended Retail Bank
in Asia Pacific 2021" from BankQuality.com; "Fastest Growing Fintech
Company, South East Asia 2021" for UBX from Global Banking and Finance;
back-to-back "Best Bank for SMEs" (2020-2021) from Asiamoney;
"SME Bank of the Year - Philippines 2021" from Asian Banking and
Finance; “Asia’s Best Bank Transformation” from Euromoney; "Asia-Pacific
Retail Bank of the Year" from Retail Banker International; "Top 2
Most Helpful Banks in Asia Pacific during COVID-19" from BankQuality.com;
"Asia Pacific Digital Trailblazer" for UnionBank and "DX CEO
Asia Pacific" for President and CEO Edwin R. Bautista from IDC Asia Pacific
DX Awards; "Best Digital Community Impact Initiative, South East Asia
2020" for UBX from CFI.co; "Fastest Growing Fintech Company, South
East Asia 2020" for UBX from Global Brands Magazine; "2020 Digital
Banker of the Year in Asia-Pacific" for President and CEO from The Asset;
three-time "Best Digital Bank Philippines" from Asiamoney and
International Finance Magazine; back-to-back Digital Transformer of the Year
Philippines" from IDC DX Awards Philippines; "Best Retail Bank
Philippines 2020" from Global Banking and Finance, The Asian Banker and
The Digital Banker; "Domestic Retail Bank of the Year Philippines"
from Asian Banking & Finance; back-to-back "Best Digital Bank
Philippines" & "Most Innovative Cash Management Services Bank
Philippines" from Global Banking and Finance; "#1 Best Service
Domestic Bank in the Philippines" at the 2020 Asiamoney Cash Management
Survey; and "Employer of the Year" awards from Stevie Awards for
Great Employers, Asian Banking and Finance, and HR Asia.
UnionBank stands firm
in its promise to power the future of banking through "Tech-Up
Pilipinas" to best serve the growing needs of Filipinos everywhere, while
pioneering innovations for a better world. As of 30 June 2021, Citi’s consumer
banking business has total assets of Php 89.5 billion including gross loans of
Php 59.7 billion, total liabilities of Php 71.7 billion including deposits of
Php 67.8 billion, investment AUM of Php 95.0 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 will pay a cash consideration for the net assets of
the Citi Philippines consumer business (subject to customary closing
adjustments) plus a premium of PHP 45.3 billion.
Based on the anticipated
increase in risk-weighted assets, the required equity is approximately Php 9.7
billion as of 30 June 2021. The acquisition is expected to be financed via a
combination of internal resources and a stock rights offering (SRO). The Bank’s
key shareholders – Aboitiz Equity Ventures, Insular Life Assurance, and Social
Security System – are fully committed to the SRO. The transaction with Citi is
expected to close in the second half of 2022. Completion is subject to
regulatory approvals, including from the Monetary Board of the Bangko Sentral
ng Pilipinas, Philippine Competition Commission, Philippine Deposit Insurance
Corporation, Securities and Exchange Commission, and Insurance Commission. Citi
will continue to operate its consumer banking business in the Philippines until
completion of the acquisition, with no immediate changes in the way it serves
its customers.
All consumer banking operations, including call centers,
Citibank online and mobile banking services, will continue to serve Citi’s
customers as usual. Customers will be contacted in the coming months with more
details. Citi will continue to operate its institutional business in the
Philippines. Morgan Stanley is acting as exclusive international financial
advisor to UnionBank in respect of the transaction. Milbank LLP and Romulo
Mabanta Buenaventura Sayoc & de los Angeles are acting as legal advisors to
UnionBank in respect of the transact
