DBS Bank Taiwan (星展台灣) is on track to grow into the largest foreign bank by assets after completing the integration of Citibank Taiwan Ltd’s (台灣花旗) consumer banking business in August or September this year, DBS Group Holdings Ltd chief executive officer Piyush Gupta told a news conference in Taipei yesterday.
Gupta announced the Singaporean banking group’s development plans in his first visit to Taipei after a five-year hiatus.
Gupta said he had previously worked for Citibank and was confident the acquisition, valued at NT$93.6 billion (US$3.09 billion) would provide a great opportunity to grow DBS’ credit card and wealth management businesses.
Photo: CNA
The expansion falls in line with the group’s strategy to deepen presence in six priority markets: Singapore, China, India, Indonesia, Hong Kong and Taiwan, Gupta said, adding that Taiwan’s thriving semiconductor and other electronics companies offer great potential.
In China, the group is keen to explore increasing its holding in Shenzhen Rural Commercial Bank (深圳農村商業銀行) around the time of an expected initial public offering in the next few years, Gupta said, without elaborating on the size of its planned investment.
DBS bought a 13 percent stake in the Shenzhen bank for S$1.1 billion (US$824 million) in 2021 as part of a long-standing goal of growing in large emerging markets.
The Shenzhen bank stake gives DBS greater access to China’s Greater Bay Area and the region’s supply chain, Gupta said.
“We think that this area will become the economic powerhouse in decades to come,” he said.
A higher level of perceived risk has surrounded growth opportunities in the Greater China region, as increased Chinese threats against Taiwan have raised geopolitical tensions between Beijing and Washington over the past year. This has triggered many Wall Street firms to reassess the risks of doing business in the region.
“There will be tensions, obviously,” but it would never escalate to a war as “the world is too interconnected and global trade is too intertwined,” Gupta said.
He added that even assuming the worst, domestic finances and banking in Taiwan would remain “resilient.”
The region-oriented strategy has paid off, as evidenced by a 20 percent increase in DBS Group’s earnings last year, whereas most peers took a hit from the global financial tumult, the banker said.
Incoming DBS Taiwan general manager Ng Sier Han (黃思翰) said the acquisition and one-time investment would scale up its consumer banking business and accelerate the bank’s growth by 10 years.
Toward the end, DBS Taiwan is striving to enhance its features and capabilities to bring its proposition on a par or better than Citibank across credit card, payment and wealth management offerings, Ng said.
It is his top responsibility to ensure that the transition for customers is as seamless as possible and with minimal customer intervention, Ng said.
“We want to become the go-to bank for local and overseas banking needs,” said Ng, who is to take up the helm at DBS Taiwan on April 1.
Outgoing general manager Lim Him Chuan (林鑫川) is to relocate to Singapore as the group’s head of strategy and planning.
The Citibank deal would enable DBS Taiwan to expand its credit card and secured loan business by 4.3 times, loans portfolio by 2.1 times, assets under management by 3.5 times, and current and savings accounts by 4.7 times, the group’s data showed.
In addition, DBS Group would strengthen investment in digitalization and grow its supply chain financing business using application programming interfaces (APIs), Gupta said.
The group is also seeking to partner with clients in their transition to net zero business models, such as carbon credit transactions, the banker said.
Despite the crypto collapse, Gupta said he believes digital currency would increasingly replace paper money, as technology is rapidly reshaping the banking industry and people’s lives.
Additional reporting by Bloomberg
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