No Korean banks want to take over Citi's Southeast Asian retail banking

Citigroup's logo is displayed at the headquarters of Citibank Korea in Seoul in this file photo taken on April 27. Yonhap

By Lee Min-hyung

None of the nation's major commercial banks have expressed an intention to take over Citibank's Southeast Asian consumer banking business, as they did not feel any “immediate need” to do so at a time when most Korean lenders are focusing more on enhancing their own brand value, officials from the banking industry said Friday.

Last month, Citigroup apparently contacted a group of Korean banks operating in Southeast Asia asking if they would consider taking over Citibank's consumer banking operations in Indonesia, Vietnam, Thailand and the Philippines.

Citi asked potential investors to submit letters of intent by the end of June to buy the regional retail banking business. But Korea's four major banking groups ― KB, Shinhan, Hana and Woori ― did not submit an LOI by the deadline.

“Citigroup wants to sign a deal to sell the regional business as a whole, which still comes as a burden for potential investors here,” an official from a major lender said. “It is realistically impossible for us to push ahead with the deal without obtaining a license to operate a bank business in all of the countries, as Citi prefers to reach a purchase of assets and assumption of liabilities (P&A) deal.”

Another financial industry source here said chances are low for major Korean banks to jump into the race to acquire Citi's Southeast Asian retail business as most of them want to concentrate on enhancing their own brand identities in Asia, which still shows huge growth potential.

“Korean banks' overseas presence remains weak compared to other major global banking groups, but the former are still sticking to a strategy of gradually expanding their profile there by enhancing their brand value,” the official said. “They will not take risks for the deal simply to expand their business, and will likely focus on steady yet balanced growth here and abroad.”