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Shinan Financial halts studying Citigroup's retail banking business Assets up for sale different from what Shinhan had expected

Translated by Kim So-in 공개 2021-06-04 08:28:37

이 기사는 2021년 06월 04일 07:58 더벨 유료페이지에 표출된 기사입니다.

Shinhan Financial Group has temporarily halted its feasibility study of acquiring Citigroup’s retail banking operations.

Shinhan Financial Holdings has suspended a data collection and analysis process for Citigroup’s Asia-Pacific operations, industry sources said Wednesday. The company has reportedly concluded that the burden is too high in terms of benefits of the acquisition and the efficiency of the acquisition method.

Shinhan started studying the target in March after media reports on the Citigroup’s restructuring in a bid to nimbly participate in a possible sale of Citigroup's assets.

Shinhan has especially focused on studying the size and value of Citigroup's retail banking business in the Asia-Pacific region, including asset status, market competitiveness and possibility of mergers and acquisitions (M&A).

However, the company has temporarily halted its studying after Citigroup announced its decision to sell its consumer banking operations in the Asia-Pacific region because the businesses and assets put up for sale were reportedly quite different from what Shinhan had expected.

Also, the U.S. banking giant has put forward the so-called “turnkey sale” condition in which Shinhan has to take over assets in other countries as well regardless of its preferences. It is said that Shinhan would have to purchase non-core assets like wealth management business in order for it to purchase the retail banking business.

Shinhan will take a wait-and-see stance for now. It plans to decide whether to join the race by observing how other prospective buyers react instead of participating in the deal from the beginning. Citigroup may loosen terms and conditions of the sale if it fails to attract positive response from potential buyers.

Citigroup will exit consumer banking in 13 countries, mostly in Asia, including Australia, China, India, Indonesia, Korea, Malaysia, the Philippines, Taiwan, Thailand and Vietnam as part of its ongoing strategic review.

Shinhan has expanded its businesses in the overseas markets through active M&As. It has interest in Citigroup’s retail banking operations in some of Southeast Asian countries including Vietnam, Indonesia, and Thailand. It has strengthened its foothold in Vietnam following its takeover of the retail unit of AZN Vietnam, the Vietnamese unit of the Australian banking group, in April 2017. (Reporting by Seul-bong Go)
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