November 18, 2013

BDO acquires Citibank Savings Bank

BDO Unibank (BDO, Buy) disclosed today that it has signed a definitive agreement for the acquisition of Citibank Savings Inc., Citi's thrift bank subsidiary in the Philippines. Based on the published balance sheet of Citibank Savings, the thrift bank had P11.8b in assets, P5.7b in net loans, P9.9b in deposits and P1.5b in equity as of 30 Jun 2013. According to its website, Citibank Savings has a total of 10 branches, 8 in Metro Manila and 2 in other cities.

Our take: Citibank Savings is a relatively small acquisition for BDO, which has P1.5t in assets, P858b in loans, P1.2t in deposits and more than 790 branches. However, the thrift bank caters to high net-worth individuals. Assuming that it can retain the upmarket clientele of Citi Savings, the acquisition will give BDO the opportunity to cross-sell a variety of bank products and services on top of the usual loans and deposits. These may include trust, wealth management and insurance products.- WealthSec