DBS Bank has agreed to acquire the consumer banking business of Citigroup in Taiwan at a premium of S$956 million (US$707 million) as it expands its presence in the region. The Singaporean bank will pay cash for the assets of Citi Consumer Taiwan. The total cost of the deal will be determined when it is closed, probably in the middle of 2023 subject to regulatory approval, DBS said in a statement on Friday. DBS will also inject S$1.2 billion into the unit to support “incremental risk-weighted assets” and capital needs. The acquisition will be funded by excess capital, and will have no impact on DBS’ ability to pay dividends, the lender said. “ Notwithstanding Covid-19 , we believe that Asia’s long-term growth trends remain intact,” said Piyush Gupta, chief executive officer of DBS Group in the statement. “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. This acquisition is no exception.” In April last year, DBS agreed to buy a 13 per cent stake in Shenzhen Rural Commercial Bank Corp (SZRCB) for 5.29 billion yuan (US$814 million). In November 2020, the Singapore lender took over India’s Lakshmi Vilas Bank. The acquisition of Citi Consumer Taiwan is expected to contribute at least S$250 million annually in net profit to DBS after Covid-19 recovery, Gupta said. Morgan Stanley is the financial advisor to DBS for the proposed acquisition. Citi Consumer Taiwan has been operating in Taiwan since 1985, and currently has 2.7 million credit cards and unsecured accounts, 500,000 deposit and wealth customers, 45 branches and around 3,500 employees. As of the end of September, it had an earning asset base of S$20.3 billion, and total deposits of S$15.1 billion. The deal is expected to accelerate DBS Taiwan’s growth by 10 years, making it Taiwan’s largest foreign bank by assets, the lender said. “Citi Consumer Taiwan is highly complementary to us, given its high-quality wealth management business as well as huge credit card customer base with a high activation rate and spending level,” said Lim Him Chuan, general manager of DBS Taiwan. DBS intends to make offers of employment to all of the 3,500 employees at Citi Consumer Taiwan. Citigroup will continue to operate the unit until completion of the deal, with no immediate changes in the way it serves its customers. For Citi, the transaction would “enable additional investment in our strategic focus areas, including our institutional businesses in Taiwan, which remains a priority market for our firm,” said Peter Babej, CEO for Citi Asia Pacific in the statement.