Singapore’s DBS Group has agreed to buy Citigroup’s consumer business in Taiwan for S$956 million ($706.6 million) above the net asset value, making it Taiwan’s largest foreign bank by assets.
DBS, Southeast Asia’s biggest lender, said in a statement on Friday that it would acquire Citi’s Taiwanese business with its 2.7 million credit cards, 500,000 customers and 45 branches.
“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,” DBS chief executive Piyush Gupta said in a statement.
“DBS plans to continue to employ all the about 3,500 employees in Citi (Taiwan) Bank’s consumer finance business,” he added. Citigroup launched consumer finance business in Taiwan since 1985.
‘Deep Spending Power’
Lin Him Chuan, general manager of DBS Bank (Taiwan), said that Citi’s consumer finance business has “high-quality wealth management business, high effective card rate and a large credit card customer base with deep spending power, which is highly comparable to DBS Bank (Taiwan) Bank”.
“The bank’s consumer finance business has an average annual net profit of S$500 million and a return on shareholders’ equity of over 20%,” DBS said.
Earlier 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.
The transactions come after Citi announced last year that it would exit its retail operations in 10 markets in Asia as it refocuses on its more lucrative wealth management businesses.
Focus on Sustainability
The Singapore bank said this week it would intensify its carbon-reduction plans with the appointment of a new chief sustainability officer.
The bank announced the appointment of Helge Muenkel, who would succeed Mikkel Larsen.
Larsen was appointed chief executive of Climate Impact X, a joint venture between DBS, SGX, Standard Chartered Bank and Temasek.
“The climate issue is an increasingly pressing one, and through sustainable finance, banks play a key role in enabling and catalysing impact,” Gupta said.
- George Russell, with Reuters
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