Under the agreement, Citi will divest its retail banking, credit card, and unsecured lending businesses in Bahrain, and continue to serve its institutional clients in the country
Citi to sell consumer bank business in Bahrain. (Credit: Rio Space on Unsplash)
US-based Citi has agreed to divest its consumer banking business in Bahrain to Ahli United Bank (AUB), as part of the US lender’s efforts to streamline its operations.
The transaction includes Citi’s retail banking, credit card and unsecured lending businesses and excludes its institutional businesses.
It will continue to serve its institutional clients in Bahrain, said the US-based lender.
The announcement closely follows the company’s recent agreement with Axis bank to divest its consumer business in India for a consideration of around $1.6bn.
Under the terms of the agreement, AUB will offer employment for all the Citi consumer employees and others supporting roles in its consumer business, upon closing.
The proposed transaction is expected to complete by the second half of this year.
Citi legacy franchises CEO Titi Cole said: “This is a positive outcome for our colleagues and our clients in Bahrain, and our top priority is to manage and support them through a seamless transition to AUB. We are proceeding with the same consideration for our remaining consumer exit markets.”
Citi has been operating its consumer banking business in Bahrain since 1989, and currently has around 500 employees and 14 ATMs across the kingdom.
The company said that AUB has been selected following a competitive auction process.
Also, the transaction will contribute to its previously announced release of $7bn of allocated tangible common equity, said Citi.
The divestiture in Bahrain marks the ninth sale, as part of its strategy to exit consumer franchises in 13 markets in the Asia Pacific and Europe, the Middle East and Africa.
Citi assured that there will be no change in the services provided to its consumer banking and wealth customers in Bahrain, until the closing of the transaction.
Citi Bahrain country officer Michel Sawaya said: “We are very pleased to announce this transaction with AUB, a leading organization with a strong growth strategy in consumer banking in Bahrain.
“We are confident AUB will provide excellent opportunities for our customers and employees. For Citi, this transaction will enable additional investment in our strategic focus areas, including our institutional businesses in Bahrain.”
The transaction, subject to customary regulatory conditions, is expected to complete by the second half of this year.