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UOB to acquire Citibank Indonesia’s consumer business
The acquisition, set to be concluded by late 2023, would double UOB's retail customer base to 1.2 million.
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Workers are hoisted on a gondola to clean the United Overseas Bank (UOB) bank building in Singapore on Aug. 29, 2019. (AFP/Roslan Rahman)
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ingapore-based lender United Overseas Bank (UOB) expects to complete an acquisition of Citibank’s (Citi) retail and credit card business in Indonesia by the fourth quarter of 2023 to strengthen its foothold in Southeast Asia’s largest economy.
UOB said on Friday that the acquisition, subject to regulatory approval from the Financial Services Authority (OJK), would double its Indonesian customer base from 550,000 to around 1.2 million.
This would grow UOB Indonesia's retail business “at a scale we could never get,” said UOB chief financial officer Wai Fai Lee.
He said the acquisition would not disrupt customer activity. Citi would continue serving customers through the Citi brand until UOB got regulatory approval, which was expected for the latter part of this year.
The acquisition is expected to raise UOB’s standing from the ninth-biggest credit card issuer in Indonesia to the fifth-biggest and to make it one of the top 10 retail banks in the country.
In terms of financial impact, the acquisition is expected to directly raise UOB Indonesia’s annual income 1.3-fold and gross loans 1.1-fold.
Citi announced earlier on Friday that it would sell its retail and credit card business in Indonesia, Thailand, Malaysia and Vietnam to UOB for US$3.6 billion. The deal includes transferring around 5,000 employees.
