Citigroup announced on Friday that it was selling four consumer banking services in Southeast Asia to Singapore’s United Overseas Bank, part of a plan to leave its retail business in 13 Asia-Pacific and European countries.
The US lender did not disclose the value of the sale of its consumer banks in Indonesia, Malaysia, Thailand and Vietnam, but said UOB would pay a S915m (US $ 680m) premium above the net asset value of the businesses.
The sale will cover all of Citi’s 5,000 banking and support staff in the four franchises, which will be transferred to UOB, a leading regional bank with a network in Southeast Asia and China, upon closing the deal.
The sale is the latest rejection of a consumer business by Citi, whose CEO Jane Fraser announced a “strategic refresh” of the borrower’s extensive international operations when she took over in April. Fraser said this week that Citi will also leave retail banking Mexico.
Citi said it expects the reorganization to release about $ 7 billion in allotted tangible common stock that it plans to reinvest in more profitable parts of the company, such as treasury services and commercial banking.
The US bank is under pressure from investors to long-term profitability gap with his peers. Over the past decade, Citigroup shares have risen 155.94 percent, compared to Bank of America’s 752.49 percent and JPMorgan’s 516.32 percent.
Last month, Citi sold its Philippine retail business to local lender UnionBank for a premium of 45.3 billion pesos ($ 887 million) above the company’s net asset value, which the banks did not disclose.
In August, the US bank sell its Australian consumer business to National Australia Bank in a deal worth about $ 882m.
Earlier this week, Citi announced it would leave Mexico after nearly a century of operations in the country.
The deal for Citi’s Southeast Asian consumer banking units will increase UOB’s footprint in the region, where it has existing operations in Malaysia, Indonesia and Thailand alongside its home market Singapore.
While Citi will remain present in the four Southeast Asian markets it leaves, UOB will acquire Citi’s credit card, wealth management and other consumer activities.
Citi plan to retain its wealth management and other consumer businesses in Hong Kong, Singapore, London and Dubai, even while withdrawing from consumer banking services in 13 markets. It is also selling its consumer businesses in India, China and Taiwan.
The US bank will report its earnings for the fourth quarter on Friday.