DBS acquires Citi Consumer Taiwan
The sale had a total cost of $2.2b.
DBS Group Holdings (DBS) has agreed to acquire Citi Consumer Taiwan, the consumer banking business of Citigroup in Taiwan, via a transfer of assets (loans of $11.3b) and liabilities (deposits of $15.1b).
Given that Citi Consumer Taiwan's net assets are negative (deposits exceed loans by $3.8b), Citigroup will transfer cash of $3.8b to DBS. DBS will pay Citigroup a premium of $956m (NT$19.8b) and inject $1.2b (NTD$24.5b) into DBS Taiwan to support incremental risk-weighted assets and future capital needs.
The acquisition will expand DBS Taiwan's credit card customer base by 5.7x to 3,280,000. Its credit card customer base has a high spending per card with over 20% above DBS' average spending. For wealth management, DBS Taiwan will increase its affluent and high net worth customer base by 1.9x and 3.7x, respectively, to 139,000 and 5,700. The combined average total relationship balance will increase by 50% to $224,000 for affluent customers and 120% to $2.4m for high net worth customers.
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