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Fri. 14 Jan 2022, 9:49am ETBenzinga
In: Earnings, Financial Advisors, M&A, News, Movers, Trading Ideas

Citigroup Inc (NYSE:C) will sell its consumer banking businesses in Indonesia, Malaysia, Thailand, and Vietnam to Singapore's United Overseas Bank.

  • As part of the deal, UOB will acquire Citi's unsecured and secured lending portfolios, wealth management, and retail deposit units that make up its consumer banking business in the four markets.
  • UOB will pay Citigroup for the acquired businesses' net assets and a premium of $690 million.
  • According to the statement, Citigroup expects roughly 5,000 employees to transfer to UOB after the deal closes.
  • Citi expects the transaction to release approximately $1.2 billion of allocated tangible common equity and an increase to tangible common equity of over $200 million. 
  • As previously announced, Citi's exit from its consumer franchises in 13 markets across the Asia Pacific and EMEA is expected to release approximately $7 billion of allocated tangible common equity over time.
  • The bank expects the deal to be completed between mid-2022 and early 2024.
  • Q4 Earnings: Citigroup's Q4 net income dropped 26% to $3.2 billion due to an increase in expenses, adding that the results included a "pre-tax impact" of about $1.2 billion related to the sale of its consumer banking businesses in Asia.
  • The bank posted a net income of $1.46 a share, beating analyst expectations for $1.37.
  • Revenue rose 1% to $17 billion, better than the $16.8 billion analysts had forecast.
  • Citigroup's operating income expanded 18% Y/Y to $13.5 billion.
  • Q4 revenue in the institutional clients' group rose 4% to $9.9 billion, primarily driven by higher revenues in Investment Banking, the Private Bank & Securities Services, partially offset by a decline in Fixed Income Markets.
  • On the consumer side, revenue fell 6% to $6.9 billion, and profit fell 42%, hurt by low interest rates and restructuring expenses.
  • Citi's FY21 net income nearly doubled to $22 billion, and revenue fell 5% to $71.9 billion.
  • Price Action: C shares are down 2.20% at $66.29 during the market session on the last check Thursday.
  • Photo by TonyTheTiger via Wikimedia