Singapore lender United Overseas Bank (UOB) has agreed to buy Citigroup’s consumer businesses in Indonesia, Malaysia, Thailand and Vietnam for about S$4.915 billion ($3.65 billion), funding the purchase with the bank’s excess capital, Reuters reported.

In a statement, UOB said that it would acquire Citi’s unsecured and secured lending portfolios, wealth management and retail deposit businesses in the four countries.

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“UOB believes in Southeast Asia’s long-term potential and we have been disciplined, selective and patient in seeking the right opportunities to grow,” said Wee Ee Cheong, UOB’s deputy chairman and chief executive.

The bank said the proposed acquisition is expected to be financed through its excess capital, and that it remains comfortable maintaining its dividend policy of a 50% dividend payout ratio.

“The total cash consideration for the proposed acquisition, will be calculated based on an aggregate premium equivalent to S$915 million plus the net asset value of the consumer business as at completion,” UOB said.

The UOB branch in Ho Chi Minh City.PHOTO: UNITED OVERSEAS BANK

It said Citigroup’s consumer business in these markets had an aggregate net asset value of about S$4 billion and a customer base of about 2.4 million as at 30 June 2021.

These generated income of about S$0.5 billion in the first half of 2021, according to Reuters.

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UOB is a leading bank in Asia with a global network of more than 500 branches and offices in 19 countries and territories in Asia Pacific, Europe and North America.

In 1935, amid the economic uncertainties following the Great Depression, UOB Vietnam opened its doors to offer banking services for the merchant community in Singapore.

Since then, UOB Vietnam has grown organically and through a series of strategic acquisitions.

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Source: Vietnam Insider

Thailand’s Bank of Ayudhya (BAY) said on Wednesday that it will acquire SHB Finance in Vietnam from Saigon-Hanoi Commercial Joint Stock Bank for 5.1 billion baht ($155.77 million).

The Saigon-Hanoi Commercial Bank (SHB) of Vietnam has reached a deal to transfer a 50% stake its financial consumer company to Thailand’s Bank of Ayudhya Public Company (Krungsri), another 50% set to follow in the next three years.

The move still awaits approval from the State Bank of Vietnam (SBV), regulators from Thailand and Japan, where the Mitsubishi UFJ Financial Group (MUFG), Krungsri’s parent company, is located.

While details of the deal were not disclosed, SHB revealed it would bring a significant amount of proceeds.

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“Vietnam’s consumer finance market is of huge potential and has plenty of room for development. After a thorough selection process, we have found a suitable partner with a strategy to develop a modern retail banking model,” said Do Quang Hien, chairman of the board of directors at SHB.

Seiichiro Akita, CEO of Krungsri, noted the experience and large network of SHB in Vietnam along with the financial strength of Krungsri would enhance SHB Finance competitiveness.

The deal also demonstrated Krungsri’s commitment to expanding its presence in ASEAN during the business plan 2021-2023 period, he added.

“We are very pleased to announce that we have signed agreements with SHB to acquire a 100% stake in SHB Finance, SHB’s consumer finance subsidiary,” Bank of Ayudhya President Seiichiro Akita said in a statement.

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Krungsri is currently the fifth-largest financial corporation in Thailand in terms of total assets and outstanding loans, with MUFG holding a 76.88% stake. The Japanese financial conglomerate is also a strategic shareholder in Vietnam’s Vietinbank with a nearly 20% stake.

Before SHB, VPBank also sold 49% in its consumer finance firm FE Credit to Sumitomo Mitsui Banking Corporation in a deal worth $1.4 billion.

As of late 2020, credit loans were estimated at VND1,800 trillion ($79 billion, accounting for 20% of total outstanding loans and a 2.5-fold increase against 2012.

This year, experts suggested credit demand would continue to rise at a pace of 13-15% year-on-year, according to a report from Vietnam’s Best M&A Advisor.

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Source: Vietnam Insider