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Citigroup (C) Closes Sale of Indonesia Consumer Banking to UOB
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Citigroup Inc. (C - Free Report) announced the completion of the sale and the full migration of its Indonesia consumer businesses to UOB Indonesia (“UOBI”). The sale includes retail banking, credit card and unsecured lending businesses, and the transfer of employees.
The sale excludes the bank’s institutional businesses. The transaction was announced in January 2022 as part of a broader agreement to sell Citigroup’s consumer banking business across Malaysia, Thailand, Vietnam and Indonesia. The sale of businesses in Malaysia and Thailand was closed on Nov 1, 2022, whereas the sale in Vietnam was completed on Mar 1, 2023.
The transaction is expected to result in a modest regulatory capital benefit to the bank. Specifically, the sale of these four consumer businesses to UOB has resulted in a regulatory capital benefit of $1.1 billion.
As part of its intention to exit consumer banking across 14 markets in Asia, Europe, the Middle East and Mexico, the Wall Street biggie has now closed sales in nine markets, including Australia, Bahrain, India, Malaysia, the Philippines, Taiwan, Thailand, Vietnam and Indonesia.
Sales aside, the company is on track to wind down its consumer businesses in China and Korea, along with reducing its overall presence in Russia. It has restarted the exit process for the consumer banking business in Poland.
In January 2022, the company revealed plans to exit the consumer, small business and middle-market banking operations in Mexico — Banco Nacional de México (“Banamex”). It remains on track to separate its business in Mexico in 2024, followed by an IPO in 2025.
Titi Cole, head of Legacy Franchises, noted, “Completing our final divestiture of a full consumer franchise in Asia marks a significant milestone in simplifying the firm. This is a testament to the commitment of our employees across these markets and a clear demonstration of Citi’s ability to execute on our strategy. We are sincerely grateful to our former employees in Indonesia and wish them the very best in their careers with UOB.”
Citigroup’s shares have lost 0.9% in the past six months against the industry’s rise of 7.8%.
Evans Bancorp, Inc. (EVBN - Free Report) entered an agreement to sell the insurance operations of The Evans Agency, LLC to Arthur J. Gallagher & Co. (AJG - Free Report) for $40 million. The completion of the deal, expected in the fourth quarter of 2023, is subject to customary closing conditions.
The sale is expected to result in an after-tax net gain of $15.1 million for EVBN. Moreover, the deal eliminates $12 million of goodwill and other intangibles. The transaction is expected to result in an improvement in the tangible common equity to tangible assets ratio by 112 basis points (bps) to 7.47%.
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Citigroup (C) Closes Sale of Indonesia Consumer Banking to UOB
Citigroup Inc. (C - Free Report) announced the completion of the sale and the full migration of its Indonesia consumer businesses to UOB Indonesia (“UOBI”). The sale includes retail banking, credit card and unsecured lending businesses, and the transfer of employees.
The sale excludes the bank’s institutional businesses. The transaction was announced in January 2022 as part of a broader agreement to sell Citigroup’s consumer banking business across Malaysia, Thailand, Vietnam and Indonesia. The sale of businesses in Malaysia and Thailand was closed on Nov 1, 2022, whereas the sale in Vietnam was completed on Mar 1, 2023.
The transaction is expected to result in a modest regulatory capital benefit to the bank. Specifically, the sale of these four consumer businesses to UOB has resulted in a regulatory capital benefit of $1.1 billion.
As part of its intention to exit consumer banking across 14 markets in Asia, Europe, the Middle East and Mexico, the Wall Street biggie has now closed sales in nine markets, including Australia, Bahrain, India, Malaysia, the Philippines, Taiwan, Thailand, Vietnam and Indonesia.
Sales aside, the company is on track to wind down its consumer businesses in China and Korea, along with reducing its overall presence in Russia. It has restarted the exit process for the consumer banking business in Poland.
In January 2022, the company revealed plans to exit the consumer, small business and middle-market banking operations in Mexico — Banco Nacional de México (“Banamex”). It remains on track to separate its business in Mexico in 2024, followed by an IPO in 2025.
Titi Cole, head of Legacy Franchises, noted, “Completing our final divestiture of a full consumer franchise in Asia marks a significant milestone in simplifying the firm. This is a testament to the commitment of our employees across these markets and a clear demonstration of Citi’s ability to execute on our strategy. We are sincerely grateful to our former employees in Indonesia and wish them the very best in their careers with UOB.”
Citigroup’s shares have lost 0.9% in the past six months against the industry’s rise of 7.8%.
Image Source: Zacks Investment Research
C presently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Divestiture by Another Finance Firm
Evans Bancorp, Inc. (EVBN - Free Report) entered an agreement to sell the insurance operations of The Evans Agency, LLC to Arthur J. Gallagher & Co. (AJG - Free Report) for $40 million. The completion of the deal, expected in the fourth quarter of 2023, is subject to customary closing conditions.
The sale is expected to result in an after-tax net gain of $15.1 million for EVBN. Moreover, the deal eliminates $12 million of goodwill and other intangibles. The transaction is expected to result in an improvement in the tangible common equity to tangible assets ratio by 112 basis points (bps) to 7.47%.