Citibank Acquisition Battle... Outline to Emerge in Mid to Late July

Yoom Young-soon, Bank President: "Results May Come in Mid to Late July"
Financial Firms Completing Due Diligence Evaluate "Cards and WM as Attractive"

Korea Citibank announced its withdrawal from the domestic consumer finance sector. Photo taken on the 19th at the Korea Citibank headquarters in Jongno-gu, Seoul. Photo by Jinhyung Kang aymsdream@

[Asia Economy Reporter Song Seung-seop] The blueprint for the sale of Korea Citibank's retail banking, which had been shrouded in fog, is expected to become clear soon. This comes as the positions of prospective buyers who have begun due diligence on Korea Citibank are likely to be disclosed within this month.

According to financial authorities and industry insiders on the 2nd, Yoo Myung-soon, CEO of Korea Citibank, recently mentioned during a meeting with the labor union that "the positions of those participating in the due diligence could be revealed by mid to late July." The union holds regular weekly meetings with CEO Yoo. This information has been shared internally with employees.

CEO Yoo's statement aligns with the announcement made by Korea Citibank immediately after its board meeting on July 3rd last month. At that time, Korea Citibank stated, while adding a caveat that "there may be some variables in the progress," that "discussions were held in a direction to present an outline for executing the exit strategy within July." Although the method of sale has not been finalized, the schedule to determine the participation of potential buyers through individual behind-the-scenes negotiations within this month remains unchanged.

This is also interpreted as a remark to prevent internal employee unrest. As unverified rumors about acquisition and employment succession issues have been rampant, CEO Yoo personally reminded the expected announcement timing. A financial sector official hinted, "There were probably baseless rumors several times a day, and various messages and inquiries must have flooded the labor-management parties," adding, "I understand that baseless rumors are also circulating widely among employees."

Due Diligence Nearing Completion... Uncertain 'Block Sale' Scenario

However, Korea Citibank maintains that it cannot confirm whether the sale will proceed by skipping the preliminary bidding process, as some have claimed. If a preferred negotiator is selected immediately, the announcement timing could be moved up due to a reduction in additional due diligence processes.

Currently, prospective buyers of Korea Citibank are conducting corporate due diligence. The process involves multiple financial firms that submitted Letters of Intent (LOI) reviewing the virtual data room opened by Korea Citibank. Most asset due diligence is in the final stages, and the firms are reportedly reviewing their participation in the final bidding.

Among the multiple financial firms that have reviewed the data, the card and wealth management (WM) sectors are considered attractive. Citi Card is noted for its high customer loyalty and the advantage of being able to retain customers even if a separate sale is conducted. The card, launched in partnership with Shinsegae, has secured high-quality customers, which also increases its acquisition appeal. The wealth management sector is evaluated as a business that attracts high-net-worth clients and provides stable non-interest income.

However, it remains uncertain whether a 'block sale' will take place as claimed by political circles and the labor union. Financial firms interested in acquisition are reluctant to assume employment for all consumer finance employees due to their relatively older age and higher average salaries. Korea Citibank has shifted its stance from "prioritizing a block sale" to "also considering preparatory procedures to implement a phased abolition plan."

This content was produced with the assistance of AI translation services.