Citigroup Asia assets set to attract DBS, StanChart: sources

Singapore

DBS and Standard Chartered (StanChart) are among the lenders planning to bid for Citigroup consumer banking assets in Asia as the US lender divests units across 5 markets in the region.

Binding bids for Citigroup's retail assets in Indonesia, the Philippines, Taiwan and Thailand are due on Friday (Oct 22), while offers for the India unit are due next week, said people familiar with the matter, who asked not to be named.

The sales offer the buyers a chance to scale up high-end credit card and wealth businesses - whose appeal to banks lies primarily in their high fees rather than interest income - in regions that no longer fit in Citigroup's refreshed strategy.

Under CEO Jane Fraser, the bank is exiting 13 markets across Asia and Europe, the Middle East and Africa. Its Australia business was sold to National Australia Bank in August.

The Asia sales come as the bank reshapes its business around more profitable units like investment banking, and focuses its wealth business around hubs in Hong Kong, London, Singapore and the United Arab Emirates.

Citigroup plans to raise US$150 billion in new money and hire 2,300 staff in Asia for wealth management by 2025. In investment banking this year, Citigroup is the top-ranked foreign firm in the IPO league tables for Asia ex-Japan, and fifth for dealmaking.

DBS plans to submit binding offers for both Indonesia and Taiwan. CEO Piyush Gupta said in August the bank's capital levels were high enough to buy more assets without raising extra funds, and expressed interest in several Asian markets.

Beyond valuation, Citigroup will evaluate the proposals in each market based on other issues such as antitrust, job protection and strategy.

Citigroup's Taiwan consumer assets could fetch about US$2 billion in a sale. DBS, StanChart, Cathay Financial Holding and Fubon Financial Holding are set to lodge bids. The business could even raise close to US$4 billion, depending on which assets are included.

Taiwan's government will monitor and prevent Citigroup from transferring high-net worth clients in Taiwan to its Singapore and Hong Kong units, the island's financial regulator said in April.

• THAILAND

Bangkok Bank is planning to make an offer for Citigroup's Thai assets, which could be valued at more than US$2 billion. Bank of Ayudhya, owned by Japan's Mitsubishi UFJ Financial Group, is also weighing a bid.

• INDIA

Citigroup has set a bid deadline next week for its Indian consumer assets, which could be valued about US$2 billion in a sale. Kotak Mahindra Bank is planning to bid for the assets. HDFC Bank and ICICI Bank are also weighing bids.

• INDONESIA, THE PHILIPPINES

DBS is planning to bid for Indonesia, while its rival UOB is considering making an offer. UOB CEO Wee Ee Cheong said in May that the bank would look at the assets.

Maybank is also weighing a bid for the Citigroup unit, the sale of which could value the business as much as US$1 billion. BDO Unibank, Metropolitan Bank & Trust, Bank of the Philippine Islands and Union Bank of the Philippines are mulling offers for Citigroup's Philippines assets, which could fetch as much as US$1 billion. BLOOMBERG