Financial services provider Citigroup (NYSE:C) has agreed to divest its consumer banking franchises in Indonesia, Malaysia, Thailand and Vietnam in an all-cash deal to UOB Group (UOB).
The purchase price has been fixed at S$915 million ($690 million). Also, the deal is expected to conclude between mid-2022 and early 2024, depending on the progress and outcome of the regulatory approval process.
The transaction includes Citi’s retail banking and credit card businesses and excludes its institutional businesses in all four countries. As per the agreed terms, after the completion of the deal, about 5,000 consumer bank and supporting employees will transfer to UOB.
Notably, Citi expects the release of about $1.2 billion of allocated tangible common equity and an increase to tangible common equity of over $200 million from this transaction.
The CFO of Citi, Mark Mason, said, “The sale of these four consumer markets, along with our previously announced transactions, demonstrate our sense of urgency to execute our strategic refresh. We are committed to working in the best interests of our shareholders by focusing our resources on businesses that can deliver growth, as well as increasing the capital we return to shareholders over time.”
Recently, Citi also announced plans to exit the consumer, small business, and middle-market banking operations of Citibanamex, its banking business in Mexico.
Analyst Rating
Recently, Evercore ISI analyst Glenn Schorr maintained a Hold rating on Citi with a price target to $64 (5.6% downside potential).
Based on 8 Buys and 7 Holds, the stock has a Moderate Buy consensus rating. The average Citigroup price target of $78.56 implies 15.9% upside potential from current levels. Shares have gained 8.7% over the past year.
News Sentiment
News Sentiment for Citi is Positive based on 143 articles over the past seven days. About 77% of the articles have Bullish sentiment, compared to the sector average of 55%, and 23% have Bearish Sentiment, compared to the sector average of 45%.
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