UOB’s Acquisition of Citigroup’s Consumer Banking Boosts ASEAN Retail Business and Unveils Exciting Perks

The acquisition of Citigroup’s consumer banking businesses in four key ASEAN markets (Malaysia, Thailand, Vietnam, and Indonesia) by UOB (United Overseas Bank) has significantly boosted its retail banking business and expanded its customer base in the region. As of March 31, 2023, UOB’s regional retail customer count exceeded seven million, and it is expected to serve around 200,000 customers in Vietnam following the completion of the acquisition in that market. The acquisition is projected to contribute a S$1 billion boost to UOB’s revenue on a full-year basis once the acquisition in Indonesia is completed by the end of 2023.

The acquisition has also diversified UOB’s business model geographically and in terms of revenue mix, providing stronger resilience. Citigroup’s portfolio, which focused on cards business and unsecured lending, has already contributed to a doubling of net credit card fees for UOB in the first quarter of 2023. Total income from the Bank’s unsecured business is expected to nearly double by the end of 2023. Additionally, loans and deposits grew by approximately 10% and 15% respectively in the first quarter of 2023 compared to the previous year.

The ASEAN-4 markets (Malaysia, Thailand, Indonesia, and Vietnam) accounted for over 35% of UOB’s Group Personal Financial Services income in the first quarter of 2023. UOB’s network of branches in Malaysia, Thailand, and Vietnam has expanded by 15 as of March 2023.

UOB’s acquisition has positioned the bank to benefit from the expected growth in the ASEAN region. Projections from the International Monetary Fund (IMF) indicate strong GDP growth for the Asia-Pacific region, with the region expected to drive over 70% of global economic expansion in 2023. Southeast Asia’s GDP growth is forecasted to be at 4.7% in 2023, according to the Asian Development Bank.

UOB aims to capitalize on the rising consumer spending in ASEAN, driven by the growing middle-class population. The bank has identified three key spending categories—travel, dining, and retail—that experienced significant growth in credit card spending. UOB has formed strategic partnerships with over 40 established brands in the region to offer exclusive rewards and privileges to its customers. These partnerships include co-branded credit cards with key consumer brands across ASEAN. UOB aims to provide a unique regional proposition where rewards and privileges are available to all UOB cardholders across ASEAN.

With its expanded regional presence, UOB is well-positioned to capture cross-border payments and wealth flows. The bank offers a wide range of financial products and services, including secured loans, deposits, wealth management, and cards offerings, catering to the diverse needs of its customers. UOB’s dominance in the credit card space in Singapore is evident, with one in two cardholders in Singapore holding a UOB credit card.

Overall, UOB’s acquisition of Citigroup’s consumer banking businesses has strengthened its position in the ASEAN market, expanded its customer base, and allowed the bank to provide enhanced perks and privileges through partnerships with renowned domestic and global brands.

15 May 2023

Author: Terry KS

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