BSP to monitor Citi's PH exit; BPI eyeing bid for its retail biz

·3 min read

THE Bangko Sentral ng Pilipinas (BSP) is closely monitoring developments following the announcement of Citigroup to undergo a strategy refresh.

Citigroup reported that it intends to focus its Global Consumer Bank presence in Asia (including the Philippines), Europe, Middle East and Africa on wealth management and institutional businesses.

Romeo Comabig, president of the Cebu Bankers Club, said they respect the position of their member bank and would not preempt any actions it will take.

“I can only assure that the banking industry remains strong and the decision of Citibank is part of its global business strategy,” he said.

Citigroup plans to exit from its retail banking business which covers credit cards, personal loans, retail deposits and other consumer-related services in 13 jurisdictions—Australia, Bahrain, China, India, Indonesia, Korea, Malaysia, the Philippines, Poland, Russia, Taiwan, Thailand and Vietnam.

BPI keen on buying

During its annual stockholders’ meeting on Thursday, April 22, 2021, BPI expressed its interest in acquiring the Philippine business of Citibank.

“We have always been admirers of the Citibank retail business. It is an excellent franchise. We’ve always looked at it, but we never believed that Citibank would ever give up on the Philippines. It’s quite public knowledge that they will exit and try to sell the business. We have told them that as soon as there is any information... we will take a look at it. Most likely, we will be interested. It’s a great business,” said Jose Teodoro Limcaoco, BPI’s new president and chief executive officer.

“We like the Citibank portfolio a lot. We like the quality, talent and the technology. If you put the BPI and Citibank portfolio, we will almost double the BPI business. Yes, we are very keen on looking at the Citibank business,” added Maria Josephine Ocampo, head of BPI’s mass retail.

Limcaoco said if given the opportunity, BPI has sufficient funds to assume Citi’s large consumer based or domestic assets.

Citi Philippines, in its report to the BSP, clarified that there will be no immediate change in its retail business operations and its retail customers shall be serviced in a business-as-usual manner until further notice.

The BSP is coordinating with Citi Philippines to ensure a smooth transition, including putting in place appropriate mechanisms to timely respond to any queries and concerns of its depositors and other stakeholders.

Credit rating

Meanwhile, the Japanese debt watcher Rating and Investment Information Inc. (R&I) has kept the Philippines’ investment grade credit rating of BBB+ with a “stable” outlook.

In a statement released Thursday, R&I recognized the role of fiscal and monetary actions in providing a favorable outlook for the Philippines in the post-Covid period.

“The Philippines’ economy suffered a severe contraction due to the Covid-19 pandemic in 2020 but is expected to recover primarily through aggressive public investment, which had driven the economy in the past several years. Fiscal and monetary policies will boost growth for some time,” the R&I said.

BBB+ is a notch away from the minimum rating within the A-territory ratings, while a “stable” outlook indicates absence of factors that may cause the rating to change over the short term. (JOB, KOC)