Standard Chartered Plc and DBS Group Holdings are bidding for Citigroup Inc.’s consumer banking business in Asia. The U.S.-based Citigroup is divesting across five Asian markets as per informed sources.
As per Bloomberg news, retail units of Citigroup in Thailand, the Philippines, Taiwan, and Indonesia are up for bidding this Friday and next week.
Citigroup sells its high-end credit card and wealth management business in regions that do not fit in their renewed scheme of things. The sale allows buyers to scale up their business in these verticals where the high upfront fees are the main incentive rather than the interest income.
Under the new CEO Jane Fraser, Citigroup is exiting 13 markets across Europe, Australia, the Middle East, Africa, and Asia. In August 2021, it sold its Australian business to National Australia Bank Ltd.
The sale in the five Asian markets will raise $ 150 billion cash for Citigroup as it plans to reshape its investment banking business around hubs like London, UAE, Singapore, and Hong Kong. They also plan to hire 2300 staff for wealth Management in Asia by 2025.
As per data compiled by Bloomberg, Citigroup Investment Banking Division is the top-ranked bank in the IPO leagues tables in Asia, excluding Japan, and fifth in deal-making.
While deliberations continue, prospective bidders may decide to back out from the bidding, a spokesman for Citigroup Asia said as the negotiations with potential bidders are evoking strong interest.
The DBS group from Singapore is planning to submit binding offers for the Taiwan and Indonesia assets. CEO of DBS Group Piyush Gupta said in August instant that DBS had enough capital to buy more assets without raising fresh funds. The DBS group has evinced interest in several Asian countries though its representative declined to comment.
Apart from the valuation of the assets on sale, Citigroup will also evaluate the buyers’ proposals based in each market based on other factors such as job protection, strategy, and antitrust.
The Bangkok Bank Pcl is interested in offering Citigroup’s Thai assets, valued at around $ 2 billion. Bank of Ayudhya Pcl, owned by Mitsubishi UFJ Financial Group Inc., is also in the race.
The Bangkok Bank and Bank of Ayudhya did not comment or reply to the email.
The Taiwan unit of Citigroup can fetch $ 2 Billion for its retail division. Standard Chartered, DBS, Fubon Financial Holding, and Cathay Financial Holding Co. are set to bid for the Taiwan assets. The chances are that valuations could go up to $ 4 billion depending on the assets included for sale.
According to the Financial regulator of Taiwan, the Taiwanese government plans to monitor this transaction as they prepare to prevent Citigroup from transferring the high-net-worth clients from Taiwan to Citigroup’s Hong Kong, and Singapore units.
Representatives of Fubon and Standard Chartered declined to comment, while Cathay Financial did not respond to emails and calls.
The Indian consumer asset division of Citigroup is valued at around $2 billion, and the bidding deadline is next week, as per sources.
The richest banker Uday Kotak owned Kotak Mahindra Bank, along with ICICI Bank and HDFC Bank, are weighing bidding options. The representatives of these banks declined to comment.
Philippines and Indonesia
DBS Holdings is bidding for Indonesia, while Singapore’s rival United Overseas Bank is also considering offering. CEO Wee Eel Cheong OF UOB had said in May they would look at Citi groups assets. The Malayan Banking Bhd is also considering bidding for the Citigroup unit, which is valued at around $ 1billion.
For Citigroup, Philippine assets sale valued at $ 1 billion, the Union Bank of the Philippines, BDO Unibank, Metropolitan Bank & Trust Co., and Bank of the Philippine Islands are interested in offering.