FOLLOWING the acquisition of Citigroup Inc.’s (Citi) consumer business, Aboitiz’s financial arm UnionBank of the Philippines has assured Citi’s customers of a seamless migration and a more improved rewards system.
UnionBank president and chief executive officer Edwin Bautista clarified in a virtual press conference on Monday, April 25, 2022, that the rewards point accumulated by Citi customers will continue and that if there is anything they would do, it is to improve the rewards program.
“We are committed to having all the features that currently exist in your Citibank credit cards to be grandfathered in into the UnionBank when we will take over the business which will happen sometime in July of this year,” said Bautista.
“As we speak a lot of work is being done to make sure all the products are mapped completely. Citi, on the other hand, is committed to continuing to support us for a year to make sure that all processes, products and systems are well-mapped and so that there would be a seamless transition,” he added.
On Dec. 23, 2021, UnionBank of the Philippines announced that it has entered into a share and business transfer agreement with various subsidiaries of Citi to acquire Citi’s consumer banking business in the Philippines.
The transaction includes Citi’s credit card, personal loans, wealth management and retail deposit businesses. The acquisition also includes Citi’s real estate interests in relation to Citibank Square in Eastwood, three full-service bank branches, five wealth centers and two bank branch lites.
Ninety-five percent of the 1,700 employees of Citibank consumer group in Manila have signed up to join UnionBank, Baustista said, which means “the bulk of the workforce will be there to continue supporting the business.”
Regulatory approvals
On April 8, the Philippine Competition Commission (PCC) approved UnionBank’s acquisition of Citi Philippines’ consumer banking business.
“Upon review of the findings and recommendation of the Mergers and Acquisitions Office and the Parties’ submissions, the Commission finds that the acquisition by UnionBank of assets of Citibank PH and Citi Square and shares in Citicorp will not likely result in substantial lessening of competition,” the commission’s decision read.
Besides, getting the approval from the PCC and Insurance Commission, Bautista said the bank is awaiting for the approval from the Bangko Sentral ng Pilipinas.
“Our stock rights offering, which will fund the acquisition, is already in motion and expected to conclude in May 2022. We remain confident to become the legal owner of the consumer portfolio by July 2022. Moreover, our digital bank UnionDigital, is also on track to launch by the second half of the year. We are closely working with the regulators to complete key requirements for the start of our operations,” Bautista told the local bourse Tuesday, April 26.
The bank ended the first quarter with a net income of P2.6 billion, which resulted in a return on equity of 9.2 percent. As of end-March 2022, total assets were at P844.4 billion, 13 percent higher than the same period last year.