Union Bank of the Philippines headed by bankero Edwin Bautista obtained the green light from the Philippine Competition Commission (PCC) to acquire the consumer banking business of Citigroup Inc. in the country.
In a three-page decision issued on April 5, the antitrust body approved the proposed acquisition by UnionBank of Citibank N.A. Philippine Branch, Citicorp Financial Services & Insurance Brokerage Philippines Inc., and Citibank Square Building.
The PCC found that the proposed takeover does not result in 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.
“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 substantial lessening of competition,” the Commission Decision read.
“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,” PCC said in the decision.
The transaction stemmed from Citi’s exit plan in 13 jurisdictions including the Philippines, and UnionBank reaching a deal for a takeover last year.
The acquisition includes the assets and liabilities of the consumer banking business of Citibank PH, 100 percent of the outstanding capital stock of Citicorp, and real estate interests in Citi Square in Quezon City and its bank branches.
The takeover by the Aboitiz-led bank 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 after the transaction.
The said acquisition is the 204th transaction cleared by the PCC to date. It is also the first for 2022 following the implementation of a P50-billion merger review threshold through Bayanihan 2.