Summary
Citigroup Inc. has entered into a definitive agreement to sell its Australian consumer banking business, a move that is part of its broader strategy to exit 13 markets in Asia and EMEA. The transaction is expected to close in the first half of 2022, subject to regulatory approvals and other closing conditions. This sale will result in the Australian consumer business being reported as held-for-sale (HFS) starting in the third quarter of 2021. Investors should note that Citigroup anticipates a pre-tax loss of approximately $670 million ($580 million after-tax) in the third quarter of 2021 related to this sale, primarily due to a $610 million pre-tax currency translation adjustment (CTA) loss. While this impacts current earnings, the company expects the sale to improve its Common Equity Tier 1 Capital ratio by reducing risk-weighted assets, a positive signal for capital strength.
Key Highlights
- 1Citigroup has signed an agreement to sell its Australian consumer banking business.
- 2This sale is part of Citigroup's strategic decision to exit consumer franchises in 13 markets across Asia and EMEA.
- 3The Australian consumer banking business had approximately $9.0 billion in assets, including $8.9 billion in loans and $6.8 billion in deposits as of June 30, 2021.
- 4The transaction is expected to be completed in the first half of 2022, pending regulatory approvals and closing conditions.
- 5Citigroup expects to report a pre-tax loss of approximately $670 million ($580 million after-tax) in Q3 2021 related to the sale, largely due to a CTA loss.
- 6The sale is anticipated to enhance Citigroup's Common Equity Tier 1 Capital ratio due to a reduction in risk-weighted assets.