Union Bank of the Philippines (UnionBank) has received approval from the Philippine Competition Commission (PCC) for the acquisition of Citi’s consumer banking franchise in the Philippines.
The acquisition includes Citibank, N.A. Philippine Branch (Citibank PH), Citicorp Financial Services & Insurance Brokerage Philippines (Citicorp), and Citibank Square Building (Citi Square).
In a decision announced on 5 April, the PCC found that the proposed takeover does not result in a substantial lessening of competition in each of the segments of the consumer banking markets.
This is due to substantial competitive constraints exerted by other banking institutions nationwide.
The commission’s decision reads: “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 a substantial lessening of competition.
“Post-transaction, significant competitive pressures or constraints remain from other banking institutions in the markets for credit card issuance, retail deposits, asset management, and unsecured loans; and no horizontal or vertical overlaps exist in the market for real estate leasing of commercial spaces in Manila, Quezon City, and Pasig.”
The deal forms part of Citi’s exit plan in 13 jurisdictions, including the Philippines. The US lender signed a deal to sell its consumer banking franchise in the Philippines to UnionBank in December last year.
The acquisition by UnionBank covers the consumer banking business of Citibank PH, which includes its credit card, retail deposit, personal and unsecured loans, and asset management portfolio. However, Citibank PH will retain institutional accounts upon closing the transaction.
