DBS Group Holdings Ltd. and    Standard Chartered    Plc are among the lenders planning to bid for    Citigroup    Inc. consumer banking assets in Asia as the U.S. lender divests units across five markets in the region, according to people familiar with the matter.

Binding bids for Citigroup& rsquo s retail assets in Indonesia, the Philippines, Taiwan and Thailand are due Friday, while offers for the India unit are due next week, said the people, who asked not to be identified because the information is confidential.

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& rsquo s refreshed strategy.

Under Chief Executive Officer 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 Ltd. 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 $150 billion in new money and hire 2,300 staff in Asia for wealth management by 2025.

Deliberations are ongoing and the prospective suitors could decide not to proceed with offers, the people said. A spokesperson for    Citigroup    in Asia said & ldquo conversations with potential buyers continue with strong interest from a broad range of bidders.& rdquo

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

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

Taiwan

Citigroup& rsquo s Taiwan consumer assets could fetch about $2 billion in a sale, the people said. DBS, Standard Chartered, Cathay Financial Holding Co. and Fubon Financial Holding Co. are set to lodge bids, the people said.

The business could even raise close to $4 billion, depending on which assets are included, one of the people said.

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

A representative for    Standard Chartered    declined to comment. Fubon and Cathay did not immediately respond to telephone calls and emails requesting comment.

  ASHWIN MOHAN

OCTOBER 21, 2021  / 01:01 PM IST
In a key twist to the ongoing sale process of Citibank India&rsquo s consumer and retail assets, DBS Bank India, the wholly-owned subsidiary of Singapore&rsquo s DBS Group Holdings, and widely considered as one of the front-runners for the mega deal, is likely to drop out of the race, sources with knowledge of the matter told Moneycontrol.

This development, which comes days before next week&rsquo s binding bid deadline, paves the way for other suitors, including domestic banking heavyweights, to aggressively pursue the transaction.  &ldquo DBS Bank India is likely to opt-out of the race for Citi Bank India&rsquo s assets due to high valuation expectations of the sellers,&rdquo said one of the persons cited above.

Two other persons also confirmed the above but added that the parent DBS Group Holdings is still keen to participate in the auction process for other Asian assets of Citibank which have also been put on the block.

All three persons spoke to Moneycontrol on the condition of anonymity.

When contacted, both Citi and DBS Group Holdings declined to comment.

In response to an email query in April from Moneycontrol on its potential interest in Citi&rsquo s India assets, DBS had said, &ldquo At this juncture, the details are still unclear. However, we have always been open to exploring sensible bolt-on opportunities in markets where we have a consumer banking franchise (India, Indonesia, China and Taiwan) and where we can overlay our digital capabilities to serve our customers better.&rdquo

According to reports, Macquarie had estimated a value of $6.3 to $8 billion for Citibank' s consumer business across ten of the 13 markets in the Asia-Pacific region. The Indian business which is also part of these ten markets could fetch between $1.91 billion $2.15 billion, according to the brokerage.

In November 2020, RBI had announced a draft scheme to amalgamate ailing Lakshmi Vilas Bank into DBS Bank India, which is owned by Singapore-based DBS Bank. In March 2019, DBS Bank adopted the wholly-owned subsidiary model in India which makes expansion flexible for overseas banks and treats them at par with local lenders.

Who else is keen on Citi India assets?

&ldquo Citi' s exit from India will be an opportunity for players in India to either acquire the existing stock of clients and/ or gain market share in segments like credit cards, deposits and retail loans,&rdquo said Jefferies in a report released earlier this year.

On April 20,  Moneycontrol had reported  that the likes of DBS Bank, HSBC, Kotak Mahindra Bank & ICICI Bank are eyeing Citi&rsquo s domestic assets.

Later on April 25, Moneycontrol was the first to report that  HDFC Bank may also join the long list of suitors  for the high-profile transaction.

Citi India deal: What is up for grabs?

On April 16, Citibank said it will exit consumer/retail operations in 13 countries across Asia and Europe, including India to focus on the institutional and wealth management business in these markets. In India, the financial powerhouse had close to 30 lakh customers in retail, 22 lakh credit cards and 12 lakh bank accounts, as of March 2020.

This is not the first time that a foreign bank has decided to put its India assets on the block. Back in July 2010, HSBC had announced that it would acquire select retail and commercial assets in India owned by the Royal Bank of Scotland. Back then RBI had given the green signal for the portfolio sale but was against the automatic transfer of RBS&rsquo s branch offices in India to HSBC, according to media reports.

Any sale of the consumer /retail assets of Citi India would be subject to an RBI approval, the bank&rsquo s officials had earlier told Moneycontrol.

The bank had advances of Rs 66,507 crore and deposits of Rs 1,57,869 crore. Citi' s retail revenue contributed 30 percent to the total in March 2020, while corporate pitched in with 50 percent. In 2018-19, retail contributed 34 percent and corporate 46 percent, according to the details available. Thus, the retail business had been struggling.