DBS Group has agreed to buy Citigroup’s consumer business in Taiwan for a fee of S$956 million, equivalent to US$706.6 million above net asset value. This will make DBS the largest foreign bank in Taiwan by assets.
The deal is part of DBS Chief Executive Piyush Gupta’s strategy to expand Southeast Asia’s largest bank in overseas markets. Previously, the company had also bought an $814 million minority stake in a private Chinese bank last year and pressured lender Lakshmi Vilas Bank in India.
“The acquisitions we’ve made since the start of the pandemic have given us a platform to build meaningful scale across some of our core markets. This acquisition is no exception,” Gupta said.
in the acquisition. DBS will also recruit more than 3,500 staff from Citi’s Taiwan business, which has 2.7 million credit cards, 500,000 deposit and wealth customers and 45 branches.
DBS said it would pay cash for the net assets of Citi’s consumer business in Taiwan plus a premium of S$956 million. It said the deal was subject to regulatory approval and was likely to close in mid-2023.
Meanwhile, DBS funded this purchase with its excess capital. The company also ensures that this purchase will not impact its ability to pay dividends.
Morgan Stanley is DBS’ financial advisor on the transaction.
The transaction comes after Citi announced last year that it would be exiting retail operations in 10 markets in Asia as it refocused on more profitable institutional and wealth management businesses.
Earlier this month, Citi also struck a deal to sell its consumer business in four Southeast Asian markets to United Overseas Bank for around S$5 billion.