Singapore Tycoon Wee Cho Yaw’s UOB To Buy Citi’s Southeast Asia Consumer Business For $3.6 Billion

United Overseas Bank's chairman emeritus, Wee Cho Yaw, is Singapore's third-largest bank by assets.

Singapore Tycoon Wee Cho Yaw’s UOB To Buy Citi’s Southeast Asia Consumer Business For $3.6 Billion
Photo by The Business Times

United Overseas Bank, led by billionaire Wee Cho Yaw, has decided to acquire Citigroup's consumer banking business in Indonesia, Malaysia, Thailand, and Vietnam as the Singapore lender expands throughout Southeast Asia. The purchase value is approximately S$4.9 billion ($3.6 billion), which includes a premium of S$915 million above the company's combined web asset worth of S$4 billion as of June last year. Upon the completion of the deal, which is expected to take place between mid-2022 and early 2024 subject to regulatory approvals, the price will be adjusted based on the company's NAV. The agreement comes after Citigroup agreed last month to sell its Philippine consumer banking business to Union Financial institution of the Philippines, whose main shareholder is the Aboitiz family, one of the country's wealthiest families.

In a statement, UOB deputy chairman and CEO Wee Ee Cheong said, "The acquired business, along with UOB's regional shopper franchise, will form a strong combination that will expand up UOB Group's business and advance our position as a number one regional financial institution." Ee Cheong is the eldest son of Wee Cho Yaw, a banking and real estate magnate who is now the bank's chairman emeritus after stepping down in 2013.

The deal will bring 2.4 million new consumers to UOB's major countries of Indonesia, Malaysia, Thailand, and Vietnam, more than tripling the group's regional client base to 5.3 million. The Citigroup regional business, which earned roughly S$500 million in sales in the first half of 2021, might immediately profit accretive to UOB, according to the Singapore-based lender. Citigroup intends to withdraw its consumer banking businesses in 13 Asian, European, Middle Eastern, and African markets. Over time, the divestments are expected to generate nearly $7 billion in designated concrete universal fairness. Citi Asia Pacific CEO, Peter Babej, stated that by focusing their business through these moves, they will be able to make further investments in their strategic focus areas, such as their institutional network in the Asia Pacific region, allowing Citi to achieve optimal returns.