SC Bank Prudent about Citigroup's Proposal
Citigroup Inc. is promoting a package deal with Standard Chartered (SC) Bank to sell Citibank Korea and its retail operations in Southeast Asia together. The American bank has reportedly suggested that if SC Bank takes over Citibank Korea, it would be given priority in acquiring Citigroup’s retail operations in Southeast Asia.
Citigroup is selling its retail banking operations in 13 countries including Korea, Southeast Asia, Australia, India, China and Russia. Citigroup is in talks with SC Bank over the sale of Citibank Korea, linking the deal with the sale of its operations in Southeast Asia. "While there are no candidates interested in buying Citibank Korea, there are many potential buyers interested in buying Citigroup’s retail operations in Southeast Asia," an industry insider explained. “So, Citigroup came up with the idea of selling them in a package.”
Citigroup wants to sell its retail banking businesses in Indonesia, Vietnam, Thailand, Malaysia and the Philippines among Southeast Asian countries. SC Bank, Development Bank of Singapore (DBS) and Mitsubishi Financial Group of Japan are mentioned as potential buyers.
SC Bank is one of the two foreign banks doing the retail banking business in Korea, with the other being Citigroup. In Korea, it operates 199 branches and manages individual customer assets of 36 trillion. Its retail division racked up net interest income of 151.4 billion won in the first quarter of 2021. SC Bank's commission income climbed from 42.6 billion won in 2020 to 56.6 billion won in 2021, with the retail division posting a 48 percent jump.
SC Bank is prudent about Citigroup's proposal. Although it is interested in Citibank Korea's wealth management-related customers, if it has to absorb Citibank Korea's entire workforce, it is too much a burden.