Citigroup (C) Sells Taiwan Consumer Banking Business to DBS
Citigroup Inc. C has completed the sale and migration of its Taiwan consumer business to DBS, which was announced in January 2022. The sale included the transfer of retail banking, credit card, mortgage and unsecured lending businesses. The transaction involved the transfer of approximately 3,000 employees. However, Citigroup retained its institutional client businesses in Taiwan.
As a result of this sale, C is expected to attain a regulatory capital benefit of approximately $1.2 billion.
Citigroup has been emphasizing growth in core businesses through streamlining operations internationally. In April 2021, it announced a major strategic action to exit the consumer banking business in 13 markets across. In January 2022, the company revealed plans to exit the consumer, small business and middle-market banking operations in Mexico.
Since then, the company has signed deals to divest consumer businesses in nine markets and completed sales in eight markets, including Australia, Bahrain, Malaysia, Philippines, Thailand, Vietnam and India, in addition to Taiwan.
In fact, Citigroup expects to complete the sale of its Indonesia consumer business in the later half of 2023. Also, it intends to restart the divestiture of its consumer banking business in Poland later in 2023.
Citigroup is also ahead of its plans to gradually wind down consumer banking business in South Korea, China and its overall presence in Russia.
Such exits will free up capital and help the company pursue investments in wealth management operations in Singapore, Hong Kong, UAE and London to stoke growth. In fact, Citigroup anticipates the release of roughly $12 billion (in aggregate) of allocated tangible common equity over time from such market exits. These efforts will likely help augment its profitability and efficiency over the long term.
Citi’s Asia Pacific CEO Peter Babej stated, "As we conclude the sale of our consumer business in Taiwan, we remain committed to growing our market-leading institutional franchise and supporting clients in the market and across the region through our global network.”
Citigroup’s shares have lost 14% over the past six months compared with the industry's decline of 8.9%.
Image Source: Zacks Investment Research
C presently carries a Zacks Rank #3 (Hold).
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