Dive Brief:
- Ahli United Bank (AUB) will buy Citi’s consumer-banking business in Bahrain in a deal that’s expected to close in the second half of this year, Citi said Monday in a press release. Financial terms were not disclosed.
- The transaction includes Citi’s retail banking, credit card and unsecured lending businesses in the country but excludes the bank's institutional businesses.
- Bahrain marks the 10th market from which Citi has solidified its retreat in the past 12 months. It has yet to sell its retail footprint in Russia, Mexico, China and Poland.
Dive Insight:
The Bahrain deal means Citi has found buyers in nine of the 13 retail markets it said it would exit in a plan laid out last April. Citi added Mexico to that list in January. Rather than maintain a widespread overseas retail footprint, the bank will focus on operations in London, Singapore, Hong Kong and the United Arab Emirates, which yield higher returns, it said last year.
Citi may face a tough road leaving at least one of those markets. Selling its Russia presence may prove problematic given the sanctions Western nations have imposed on the country since its Feb. 24 invasion of Ukraine.
If a wind-down becomes necessary there, it wouldn't be the first time in recent memory that Citi would have faced that consequence. The bank announced in November it would incur between $1.2 billion and $1.5 billion in charges after it failed to find a buyer for its South Korea operations.
As for Monday's deal, Michel Sawaya, Citi's Bahrain country officer, said the bank is "confident AUB will provide excellent opportunities for our customers and employees."
"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" said Titi Cole, Citi's CEO of legacy franchises, a unit the bank established this year to help investors more easily track assets it aims to offload.
The Bahrain sale marks the second overseas deal Citi has struck in the past week. The bank agreed Wednesday to sell its India consumer-banking footprint to Mumbai-based Axis Bank for $1.6 billion — the most lucrative so far of Citi's international spinoffs.
The bank agreed in January to sell its Taiwan retail presence to DBS. Earlier that month, it announced it would sell its consumer-banking businesses in Indonesia, Malaysia, Thailand and Vietnam to United Overseas Bank. Citi struck a deal in December to sell its Philippine retail footprint to Union Bank of the Philippines, and spun off its Australian consumer-banking footprint to National Australia Bank in August.
Citi disclosed in late February it had roughly $9.8 billion in exposure to Russia — and risks losing "a little less than half of that" under a "severe stress scenario." However, Mike Mayo, an analyst with Wells Fargo, has estimated Citi's loss at $1.5 billion. The bank said March 14 that it would stop soliciting new business clients in Russia and help multinational corporations extricating themselves from business in the country.
