Preferred Citibank Korea buyer may be named in July

Potential bidders for Citibank Korea’s consumer banking business have started due diligence of the bank, leading to expectations that a preferred buyer could be named as early as next month.

It was reported that several financial service providers who have submitted a letter of intent to buy the Citibank business have been inspecting confidential documents via the bank's virtual data room.

Citibank declined to identify the bidders but had shared that over four financial firms are interested.

Industry sources picked KB Financial Group, Shinhan Financial Group, and DGB Financial Group as potential candidates to buy Citibank Korea’s retail operations.

Upon the online due diligence's completion, Citibank could announce the top potential buyer.

Since Citigroup Chief Executive Jane Fraser announced on Apr. 15 the company intends to pull out of 13 countries, Citibank Korea has been entertaining bidders.

Citigroup is eyeing to complete the sale as early as possible before job security at the company becomes an issue among South Korean politicians who are gearing up for next year’s presidential election.

As of the end of May, Citibank Korea consigned 1.41 trillion won to overseas funds, accounting for 86.8 percent of its total fund products.

Citibank Korea’s credit card business also counts high net-worth individuals among its members.

Citibank Korea’s employees have an average salary estimated at 112 million won, higher than that of most domestic banks, due to their long tenure of an average of 18.3 years as of the end of last year.

Potential bidders are reportedly hesitant to take on all the staff as the successful buyer may be obliged to pay as much as 1 trillion won in labor costs.

Citigroup entered South Korea's consumer banking market in 2004 when it acquired KorAm Bank.