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(Reuters) |
Citibank Korea’s planned announcement concerning details of its consumer banking business exit strategy was delayed by nearly a month on Friday, indicating that it may be facing more hurdles in the sell-off process.
The firm previously said it would reveal the details of its exit plan -- whether it would sell off the entire retail banking business or in parts -- in July. A complete pull-out of the business in phases has been mentioned as a viable option as well.
Citibank Korea CEO Yoo Myung-soon notified its employees about the rescheduled plan in an email, written in Korean, Thursday afternoon.
“Because of the schedules of ongoing due diligence of potential buyers and consultation with our board members and the financial authorities, we are preparing to share the details of our exit plan in August.”
She reiterated that multiple financial businesses have submitted letters of intent for the acquisition and that Citibank Korea was in the process of assessing the potential bidders.
Though Citibank Korea has yet to officially disclose the list of the potential bidders, it reportedly invited them to participate in its virtual data room in June, as part of due diligence. More than four financial institutions have expressed interest in the consumer banking business, local reports said, but most seek a partial acquisition, such as its wealth management or credit card business.
The potential buyers remain pessimistic about retaining all employees, Citibank Korea told reporters in May. The firm suggested its workers take voluntary redundancy as an option in a recent email sent to its employees last month, as a result, in an apparent attempt to smooth the path out of retail banking.
Industry sources have recently named KB Financial Group among the list of potential buyers, with one of Korea’s five banking giants reportedly interested in bolstering its wealth management business. But a KB official said earlier this month “it has not entered due diligence concerning a Citibank Korea sell-off.”
According to local news outlet Seoul Economic Daily on Thursday, Citibank Korea’s parent company Citigroup is even considering a sale to London-based Standard Chartered Group of its consumer banking business in both Korea and Southeast Asia as a package deal.
Critics have said that the financial authorities’ “excessive intervention” in the sale process has been delaying the schedule.
Citibank Korea is a wholly owned subsidiary of Citibank Overseas Investment, based in the US state of Delaware. It was launched in 2004, decades after Citigroup opened its first branch here in 1967.
Citibank Korea’s net profit in the January-March period fell 19 percent on-year to 48.2 billion won ($43.2 million) and its total assets shed 0.9 percent to 51.7 trillion won in the same period.
By Jung Min-kyung (
mkjung@heraldcorp.com)
