Citigroup to Sell Taiwan Consumer-Banking Business to DBS

Citigroup Inc.

C -0.93%

agreed to sell its consumer-banking business in Taiwan to Singapore-based

DBS Group Holdings Ltd.

DBSDY -0.15%

, the latest in a series of divestitures as it shrinks its international retail footprint to focus more on serving businesses and affluent clients.

The deal, which includes a premium for Citigroup of more than $700 million, means it has now found buyers for seven of the 10 consumer markets in the Asia-Pacific region that it had wanted to exit.

Singapore’s largest bank by market value, DBS has been acquisitive since the Covid-19 pandemic began, taking over a struggling lender in India and buying a stake in a mainland Chinese bank.

DBS said Friday it will pay Citigroup cash equivalent to the net assets transferred plus a premium of 956 million Singapore dollars, or about $706.6 million. In total it will inject about S$2.2 billion into DBS Taiwan. It said earnings at the Citigroup operations averaged about S$250 million annually before the pandemic.

The Wall Street Journal had reported earlier this month that the two banks were nearing a deal.

Citigroup last year laid out plans to exit consumer banking in 13 markets, including 10 in Asia, as well as Bahrain, Poland and Russia. It is concentrating its consumer-banking and wealth-management businesses in Hong Kong, Singapore, London and Dubai.

Citigroup has since agreed sales in Australia, the Philippines, and four other Southeast Asian nations, while it plans to shut its South Korean consumer operation. It hasn’t announced consumer-banking deals in either India or mainland China.

On Friday, Citigroup said the Taiwanese sale would release about $800 million of allocated tangible common equity, and allow it to invest more in key areas, including serving institutional clients in Taiwan.

Showing the U.S. bank’s strategic focus in Asia on its wealth and institutional businesses, last year Citigroup raised more than $200 billion in the capital markets for Asian clients, hired more than 650 wealth-management staff in Hong Kong and Singapore; and added several billion dollars in client assets, a regional spokesperson said.

DBS will make job offers to all 3,500 of Citigroup’s consumer bankers in Taiwan, and take over the seller’s 45 bank branches. It expects 10% to 20% attrition, given overlaps in the two businesses, and aims to close the deal in mid-2023.

The business being sold has S$20.3 billion, or some $15 billion, of earning assets, and S$15.1 billion of deposits, DBS said Friday, and will help it become Taiwan’s largest foreign bank by assets.

“Notwithstanding Covid-19, we believe that Asia’s long-term growth trends remain intact,” said DBS Chief Executive

Piyush Gupta.

“The acquisitions we have made since the start of the pandemic have given us a platform to build meaningful scale in some of our core markets.”

Mr. Gupta said DBS wasn’t looking at acquiring any other regional assets from Citigroup.

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