On June 24, the Dutch multinational bank ING declared its decision to leave the Philippines' retail banking industry by the end of 2022, citing economic uncertainty worldwide.
"However, the uncertain global macro situation in the last few years led to ING deciding not to expand the activities to other countries, which meant that the retail operations in the Philippines had to be re-assessed for its scalability as a standalone business," ING said in a blog post.
As part of its larger objectives for Asia retail banking, ING began its retail business in the Philippines in 2018. It offers savings accounts, current accounts, and consumer lending to more than 380,000 customers. Retail customers of ING bank Philippines do not need to take action as their accounts have not been changed, and their money is still secure. Through the ING digital bank app, they may still access and transfer their funds whenever they want. Additionally, because ING is under the control of the Bangko Sentral ng Pilipinas and a PDIC member, their money is likewise kept safe and secure.
The retail banking services and products provided by ING bank Philippines will eventually be terminated, and the ING digital bank app will be shut down before the end of 2022 due to the withdrawal decision. ING will also notify customers of any changes that will be made, such as the discontinuation of bank services effective September 1, 2022.
In order to expand its position in the nation and maintain its global shared services operations there, according to ING Philippines' national head Hans Sicat, it will continue to invest in its wholesale banking business. Around 3,000 people work for ING's Business Shared Services, which assists other divisions globally, and about 120 people work for ING Philippines in both wholesale and retail banking.
"ING will continue to invest in growing our wholesale banking business to strengthen our position in the country, and we have plans to increase our focus on sustainable finance. Our high-profile hires are steps in this direction. We hope to take advantage of the growth prospects in various sectors like renewable energy, technology, media and telecommunications, infrastructure, and financial institutions, among others," Sicat said.
ING has also announced its exit over a year after American banking giant Citi revealed its bank is leaving the Philippine consumer banking business.
The acquisition of Citi's consumer banking business in the Philippines by UnionBank of the Philippines for P55 billion was announced by Citi in December of last year. In addition to Citicorp Financial Services and Insurance Brokerage Philippines Inc., which offers insurance and investment products and services to retail customers, the transaction also includes Citibank Philippines' local credit card, unsecured lending, personal loan, deposit, and investment businesses.
UnionBank stated they would use internal resources and acquire additional capital through a stock right offering to pay for the multibillion-peso transaction. In the second half of 2022, the transaction with the bank leaving the Philippine consumer banking business is expected to be finalized.
The American banking's real estate holdings at Square in Eastwood, together with three full-service Citi branches, five wealth centers, and two bank branch lines, are also included in the acquisition. Additionally, UnionBank will absorb roughly 1,750 consumer banks and supporting employees due to the transaction.
"Citi will continue to serve institutional clients in the Philippines and the Asia Pacific as we have for over a century. We are very pleased with today's announcement, and we will use the capital generated to invest in our strategic priorities," Citi Asia Pacific CEO Peter Babej said.
Over 950 multinational corporations and prominent local corporations, including 90% of the top 20 companies by market capitalization on the Philippine Stock Exchange, get a wide range of services from Citi Philippines' institutional business. By the time the deal closes, Citi estimates that allocated tangible common equity will be released for $300 million and increased by the equivalent of $500 million.
Customers shouldn't be worried, says Citibank Philippines, because this decision will not affect how Citi serves its clients in the Philippines. Customers can continue using Citibank's credit cards, mortgage products, online and mobile banking services, and other services without changing their accounts or holdings. Customers of Citi will be contacted in the upcoming months with more information, as per UnionBank.
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