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Citigroup Asia retail units set to attract DBS, UOB, StanChart: Sources

HONG KONG (BLOOMBERG) – DBS Group Holdings, UOB and Standard Chartered Bank are among the lenders planning to bid for Citigroup consumer banking assets in Asia as the United States lender divests units across five markets in the region, according to people familiar with the matter.

Binding bids for Citigroup’s retail assets in Indonesia, the Philippines, Taiwan and Thailand are due on Friday (Oct 22), while offers for the India unit are due next week, said the people, who asked not to be identified because the information is confidential.

The sales offer the buyers a chance to scale up high-end credit card and wealth businesses – whose appeal to banks lie primarily in their high fees rather than interest income – in regions that no longer fit in Citigroup’s refreshed strategy.

Under chief executive officer Jane Fraser, the bank is exiting 13 markets across Asia and Europe, the Middle East and Africa. Its Australia business was sold to National Australia Bank in August.

The Asia sales come as the bank reshapes its business around more profitable units like investment banking, and focuses its wealth business around hubs in Hong Kong, London, Singapore and the United Arab Emirates. Citigroup plans to raise US$150 billion (S$201 billion) in new money and hire 2,300 people in Asia for wealth management by 2025.

In investment banking this year, Citigroup is the top-ranked foreign firm in the initial public offering league tables for Asia ex-Japan, and fifth for deal-making, according to data compiled by Bloomberg.

Deliberations are ongoing and the prospective suitors could decide not to proceed with offers, the people said. A spokesman for Citigroup in Asia said “conversations with potential buyers continue with strong interest from a broad range of bidders”.

Singapore’s DBS plans to submit binding offers for both Indonesia and Taiwan, the people said. CEO Piyush Gupta said in August that the bank’s capital levels were high enough to buy more assets without raising extra funds, and expressed interest in several Asian markets. A representative for DBS declined to comment.

Beyond valuation, Citigroup will evaluate the proposals in each market based on other issues such as antitrust, job protection and strategy, one of the people said.

Taiwan

Citigroup’s Taiwan consumer assets could fetch about US$2 billion in a sale, the people said. DBS, StanChart, Cathay Financial Holding and Fubon Financial Holding are set to lodge bids, the people said.

The business could even raise close to US$4 billion, depending on which assets are included, one of the sources said.

Taiwan’s government will monitor and prevent Citigroup from transferring high-net-worth clients in Taiwan to its units in Hong Kong and Singapore, the island’s financial regulator said in April.

Representatives for StanChart and Fubon declined to comment. Cathay did not immediately respond to telephone calls and e-mails seeking comment.

Thailand

Bangkok Bank is planning to make an offer for Citigroup’s Thai assets, which could be valued at more than US$2 billion, the people said.

Bank of Ayudhya, owned by Japanese lender Mitsubishi UFJ Financial Group, is also weighing a bid, they said.

A representative for Bangkok Bank declined to comment, while Bank of Ayudhya did not immediately respond to an e-mail seeking comment.

India

Citigroup has set a bid deadline next week for its Indian consumer assets, which could be valued about US$2 billion in a sale, the people said.

Kotak Mahindra Bank, which is controlled by the world’s richest banker, Mr Uday Kotak, is planning to bid for the assets, the people said. HDFC Bank and ICICI Bank are also weighing bids, they said.

Representatives for Kotak Mahindra and HDFC declined to comment. ICICI did not respond to e-mails seeking comment.

Indonesia and the Philippines

DBS is planning to bid for Indonesia, while Singapore rival UOB is considering making an offer, the people said. UOB CEO Wee Ee Cheong said in May that the bank would look at the assets.

Malayan Banking is also weighing a bid for the Citigroup unit, the sale of which could value the business at up to US$1 billion, the sources said.

A representative for Maybank declined to comment. UOB did not immediately respond to requests for comment.

BDO Unibank, Metropolitan Bank & Trust, Bank of the Philippine Islands and Union Bank of the Philippines are mulling offers for Citigroup’s Philippines assets, which could fetch as much as US$1 billion in a sale, they said.

Union Bank president Edwin Bautista said in response to a Bloomberg News query that the assets will likely go to one of the country’s big three banks, and declined to comment further. Representatives for BPI and Metrobank declined to comment, while a representative for BDO Unibank could not immediately comment.

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