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DBS to buy Citi's consumer banking business in Taiwan

DBS to buy Citi's consumer banking business in Taiwan

File photo of the DBS building in Singapore on Aug 5, 2015. (File photo: AFP/Roslan Rahman)

SINGAPORE: DBS Group, Southeast Asia's largest bank, has agreed to buy Citigroup's consumer banking business in Taiwan via a transfer of assets and liabilities and will take over the 3,500 staff employed in the retail arm.

It will pay cash for the net assets of Citibank's Taiwan consumer banking business plus a premium of S$956 million, DBS said on Friday (Jan 28).

DBS said that the proposed acquisition makes "strategic sense" because it will help scale up its Taiwan operations in a market that is attractive for its wealth and technology sectors.

The acquisition will also help accelerate DBS Taiwan’s growth by at least 10 years, making it Taiwan’s largest foreign bank by assets, the lender said.

“Notwithstanding COVID-19, we believe that Asia’s long-term growth trends remain intact," said DBS Group CEO Piyush Gupta.

"Citi Consumer Taiwan is a highly attractive, high-returns business that is expected to contribute at least S$250 million annually in net profit to DBS after COVID-19 recovery. Post-transaction, DBS Taiwan will be propelled to the top ranks of Taiwan’s banking sector,” he added. 

Subject to regulatory approvals and migration, the target completion date is expected in the middle of 2023.

Citi's consumer business in Taiwan currently has 2.7 million credit cards and unsecured accounts, 0.5 million deposit and wealth customers, and 45 branches.

Citi announced last year that it would exit retail operations in 10 markets in Asia as it refocuses on its more lucrative institutional and wealth management businesses.

This month, Citi struck a deal to sell its consumer business in four Southeast Asian markets to United Overseas Bank for about S$5 billion.

DBS has been operating in Taiwan since 1983 and became a locally-incorporated subsidiary in 2012.

Source: Agencies/CNA/aj


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