UOB to lift income from ASEAN-4 markets by 40% with Citi consumer biz acquisition

Completion of the acquisitions is expected to take place from H2 2022 to Q1 2024.

UOB’s acquisition of Citigroup’s consumer banking businesses in Malaysia, Thailand, Indonesia, and Vietnam will lift the bank's income from these ASEAN markets by 40%, according to UOB Kay Hian.

Per country, UOB Kay Hian said the bank’s income will grow by 20% in Malaysia, 60% in Thailand, 30% in Indonesia, and 100% in Vietnam.

The acquisition worth $5b will also strengthen the bank’s existing retail customer base in the four markets to 5.3 million, UOB Kay Hian said.

As of June 2021, the bank’s customer base in the four markets was at 2.4 million; of which, 1.1 million are from Thailand, 0.6 million from Malaysia, another 0.6 million from Indonesia, and 0.2 million from Vietnam.

Excluding one-off transaction costs, UOB Kay Hian said the acquisition will is also expected to be immediately accretive to UOB’s EPS and ROE.

“Citigroup’s consumer business has an aggregate net asset value of $4.0b and generated an income of $0.5b in 1H21,” the analyst reported.

Meanwhile, including one-off transaction costs, the acquisition is expected to be accretive to EPS and ROE by 2023.

UOB’s acquisition is expected to be completed from the second half of 2022 to the first quarter of 2024, subject to regulatory approvals.

The acquisition comprised of unsecured and secured lending portfolios, wealth management, and retail deposit businesses in Malaysia, Thailand, Indonesia, and Vietnam.