DBS to buy Citi’s Taiwanese retail unit for $ 707 million as Reuters seeks growth

By Anshuman Daga and Indranil Sarkar

SINGAPORE (Reuters) – DBS Group agrees to pay $ 956 million ($ 706.6 million) to buy Citigroup (NYSE:) Consumer business in Taiwan, Singapore’s lender is becoming the largest foreign bank in Taiwan in terms of assets, boosting growth as purchases in the region increase.

The deal is part of a strategy by DBS CEO Piyush Gupta to expand its largest bank in Southeast Asia into foreign markets, which last year bought a $ 814 million stake in a privately owned Chinese bank and lender Lakshmi Vilas Bank of India.

“The purchases we have made since the pandemic began have given us a platform to build a significant scale in some of our core markets. This purchase is no exception,” Gupta said on Friday.

The transaction comes after Citi announced it would cease retail operations in 10 Asian markets last year as it refocuses its organization and wealth management on profitable businesses.

DBS, which earns most of its profits from Singapore, said it would take 2.7 million credit cards, 500,000 deposits and wealth customers and about 3,500 employees of Citir’s Taiwan business with 45 branches.

Gupta said Citi’s Taiwanese consumer business was “very attractive and profitable” as DBS expects to make a net profit of at least S $ 250 million annually after recovering COVID-19.

DBS said Citi would pay for its net consumer business assets in Taiwan plus a premium of S $ 956 million, which will be adjusted when the deal is expected to close in mid-2023. DBS will inject $ 1.2 billion in capital.

Citi’s Taiwanese business had total gross loans of S $ 11.3 billion and deposits of S $ 15.1 billion, DBS said.

DBS said the purchase, funded by excess capital, will not affect its ability to pay dividends.

Morgan Stanley (NYSE 🙂 He is a financial advisor to DBS in the transaction.

Citing sources, Reuters reported on Thursday night that DBS would announce the purchase on Friday.

Earlier this month, Citi struck a deal in four Southeast Asian markets to sell its consumer business to the United Overseas Bank of Singapore (OTC 🙂 for $ 5 million.

($ 1 = $ 1.3529 Singapore Dollar)