The Bangko Sentral ng Pilipinas (BSP) said it will closely monitor Citigroup, Inc. exit from retail banking in the Philippines to ensure a smooth transition as Philippine banks express interest in acquiring the US bank’s loan book.
“Citi Philippines, in its report to the BSP, clarified that there will be no immediate change in its retail business operations and its retail customers shall be serviced in a business-as-usual manner until further notice,” the central bank said in a statement Friday.
Citi announced last week that it will be exiting the consumer banking business in 13 Asia-Pacific markets including the Philippines, but it will keep its corporate banking business.
“The BSP is coordinating with Citi Philippines to ensure a smooth transition, including putting in place appropriate mechanisms to timely respond to any queries and concerns of its depositors and other stakeholders,” the central bank said.
Citi is also planning to exit the consumer business in Australia, Bahrain, China, India, Indonesia, South Korea, Malaysia, Poland, Russia, Taiwan, Thailand and Vietnam, while retaining its institutional clients group.
Various Philippine banks have expressed interest in acquiring Citi Philippines’ assets, most recently BDO Unibank, Inc. and East West Banking Corp. (EastWest Bank).
“We will likely take a look at it. It’s a good business franchise that any bank will be interested in so it’s not something that you can ignore,” Nestor V. Tan, BDO’s president and CEO, said during the BDO shareholder meeting Friday.
“However, we have to be cognizant that because of our size, the overlaps and the stickiness of the business for sale may be a factor,” he added.
EastWest Bank President and CEO Antonio C. Moncupa, Jr. said Citi Philippines, which has the largest credit card business in the country by issuance and also a significant wealth management operation, controls businesses where EastWest Bank “wants to grow.”
“We are certainly very interested to know more about the opportunity and see how it fits our strategic intent towards our growth and profitability that is sustainable. We’ll see what happens, let’s wait for developments,” Mr. Moncupa said when asked at his bank’s shareholder meeting Friday.
On Thursday, Bank of the Philippine Islands (BPI) also expressed interest in bidding for Citi’s portfolio.
“While we confirm our interest, we are in no position to comment on Citibank’s plans. There is no other material information to disclose at this time,” BPI told the stock exchange Friday.
Citi established operations in the Philippines in 1902. It currently has over 8,000 employees across its corporate and retail businesses, as well as in service centers. — Beatrice M. Laforga