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Citibank to exit consumer banking business in four SEA countries

By Debabrata Das

09:11, 14 January 2022

A Citibank branch in Kuala Lumpur
A Citibank branch in Kuala Lumpur – Photo: Shutterstock

In a continuation of its exit strategy from the consumer banking business in the Asia-Pacific region, Citibank has agreed to sell its consumer banking franchises in Indonesia, Malaysia, Thailand and Vietnam to Singapore’s United Overseas Bank (UOB) Group.

UOB will pay a premium of SGD915m ($680m) over net asset value of SGD4bn of Citibank’s consumer businesses in the four countries. The transaction will include retail banking and credit card business, but exclude the institutional business in all four countries. UOB will also assimilate 5,000 Citibank staff working in the four countries.

“We are confident that UOB, with its strong culture and broad regional ambitions, will provide excellent opportunities and a long-term home for our consumer banking colleagues in Indonesia, Malaysia, Thailand and Vietnam,” said Peter Babej, Citi Asia-Pacific CEO, in a statement.

Acquisition to beef up UOB

“Focussing our businesses through these actions will facilitate additional investment in our strategic focus areas, including our institutional network across Asia Pacific, driving optimal returns for Citi,” he added.

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“The acquisition of Citigroup’s retail business in our key markets of Indonesia, Malaysia, Thailand and Vietnam is a great opportunity that comes at the right time...The acquired business, together with UOB’s regional consumer franchise, will form a powerful combination that will scale up UOB Group’s business and advance our position as a leading regional bank,” said Wee Ee Cheong, deputy chairman and CEO of UOB, in a separate statement.

Late last year, Citi had exited the consumer banking business in the Philippines, having sold the business to local lender UnionBank. Earlier in 2021, it also sold its Australian consumer banking business to National Australia Bank.

Citi expects to complete the sales in Indonesia, Malaysia, Thailand and Vietnam between mid-2022 and early 2024, depending on the progress and outcome of the regulatory approval process.

Read more: Citibank to exit the Philippines’ consumer banking business

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The difference between trading assets and CFDs
The main difference between CFD trading and trading assets, such as commodities and stocks, is that you don’t own the underlying asset when you trade on a CFD.
You can still benefit if the market moves in your favour, or make a loss if it moves against you. However, with traditional trading you enter a contract to exchange the legal ownership of the individual shares or the commodities for money, and you own this until you sell it again.
CFDs are leveraged products, which means that you only need to deposit a percentage of the full value of the CFD trade in order to open a position. But with traditional trading, you buy the assets for the full amount. In the UK, there is no stamp duty on CFD trading, but there is when you buy stocks, for example.
CFDs attract overnight costs to hold the trades (unless you use 1-1 leverage), which makes them more suited to short-term trading opportunities. Stocks and commodities are more normally bought and held for longer. You might also pay a broker commission or fees when buying and selling assets direct and you’d need somewhere to store them safely.
Capital Com is an execution-only service provider. The material provided on this website is for information purposes only and should not be understood as an investment advice. Any opinion that may be provided on this page does not constitute a recommendation by Capital Com or its agents. We do not make any representations or warranty on the accuracy or completeness of the information that is provided on this page. If you rely on the information on this page then you do so entirely on your own risk.

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