Bank of Ayudhya Plc (BAY) has been chosen as the suitor for the sale of its retail assets of US based Citibank N.A.
Bloomberg reported that BAY was chosen as the winner of the bidding process for its retail assets which the news outlet said was paying US$2 billion.
BAY, which is majority controlled by Japan’s Mitsubishi UJF Financial Group Inc., had been one of the 4 bidders for the Thai assets of Citibank. The other bidders were local giant Bangkok Bank Plc., the newly merged Thanachart TMB Bank Plc (TTB) and Singapore based United Overseas Bank Plc (UOB).
Citibank (Thailand), which has assets of just over 51 billion baht as per its reporting to the Bank of Thailand (BoT), has been in the process of being sold by its parent company Citibank N.A.. It’s part of Citibank’s exiting of up to 13 key markets including Thailand and Taiwan markets and high potential growth markets such as India, Indonesia, and China. Citibank (Thailand) reports assets and liabilities for the entire group and does not breakdown the assets/liabilities between corporate and retail banking.
The process started in April this year and is still ongoing despite it’s ‘unofficial’ winning by BAY.
The news of the buyout brought trading shares down by 0.25 baht a share before the afternoon session break but the shares of BAY ended the day 1.50 baht or 4.29% higher to end the day at 36.50 baht a piece, amid optimism by investors for the benefit that BAY could derive from this buyout.
Neither Citibank (Thailand) nor the parent company Citibank N.A. has made any comments on who the winner of the bid is.
But some of the other bidders have already expressed their disappointment on the news saying that it is disappointing to see such a good asset slipping from their hands.
“I know we are out of the deal not because we were informed but due to the lack of the chemistry of the deal since we submitted the bid,” one of the bidders who was involved with the bidding process told Thai Enquirer.
Another bidder who was also involved in the deal said that he was “disappointed” to hear the news, but that there was nothing official from Citibank, so he was keeping his fingers crossed that the news was incorrect.
Goldmine of Good Quality Asset
Thai assets of Citibank were one of the prized assets for sale in the region and was only second to that of Taiwan, which was pulling in the majority of profits in this part of the region for Citibank N.A.
Even during the pandemic, Citibank (Thailand) reported net profit of 1.72 billion baht in 2020 against 5.15 billion baht in 2019. Meanwhile Citibank (Thailand), at the end of June 2021, as per its reporting to the Bank of Thailand, had non-performing loans of a mere 1.26% of its nearly 91 billion in loans.
The credit card and personal loan portfolio are of similar size to that of Krung Thai Card Plc (KTC) which has a market capitalization of US$4.5 billion, although industry insiders says that the portfolio of Citibank (Thailand) are of better quality as the spending power is higher than that of KTC.