The board of directors of Union Bank of the Philippines approved Thursday, Dec. 23, 2021, the acquisition of Citigroup’s consumer banking business in the Philippines, paving the way for the bank to become the fourth largest in the credit card business and a major player in the wealth management business in the country.
To fund the acquisition, the bank will raise up to P40 billion via a stock rights offering (SRO) to all existing shareholders. The transaction value, however, has yet to be finalized and is still subject to regulatory approvals.
In a disclosure to the Philippine Stock Exchange, the bank said its shareholders — Aboitiz Equity Ventures, Inc. (AEV), The Insular Life Assurance Co., Ltd. and Social Security System — have committed to fully subscribe to their respective allocations as well as to any SRO shares not taken up by other shareholders.
In a statement, UnionBank's parent firm AEV said the transaction will cover Citi's credit card, personal loans, wealth management, retail deposit businesses as well as the Citibank Square building in Eastwood and all its branches.
AEV said it has been looking forward to this transaction as it is immediately value accretive for UnionBank.
"UBP is acquiring a market leading consumer banking business which is not only profitable but also known for innovation and customer service," AEV said.
“We are confident that this acquisition will be truly transformative for the bank. Through it, UnionBank will become the fourth largest in the credit card business and a major player in the wealth management business. It is also expected to deliver significant revenue synergies and will come with a whole team of talented professionals from Citibank,” said Aboitiz Group president and chief executive officer Sabin M. Aboitiz.
UnionBank is the second largest revenue contributor in the Aboitiz Group of Companies and is expected to continue growing its business as it continues to reap the benefits from its digital transformation strategy, AEV said. (MTVI/Ventures Cebu)