Bisnis.com, JAKARTA – DBS Group Holdings Ltd. Has sufficient capital to bid on Citigroup Inc.’s consumer investments. in India valued at $ 2.7 billion ($ 2 billion or IDR 28.82 trillion equivalent) with no additional funding.

This was conveyed by Kevin Kwek, an analyst at Sanford C. Bernstein & Co. as quoted Bloomberg, Thursday (May 20th, 2021).

According to him, this buying analyst for DBS is referring to the term “go big or go home” with a view to further expansion in India.

DBS chief executive officer Piyush Gupta said last month he was interested in seeing U.S. bank assets sold in the South Asian country as well as China, Taiwan and Indonesia.

The acquisition of the Citi India entity is DBS’s largest acquisition since 2001, when the Singaporean company spent $ 5.4 billion to purchase the Hong Kong entity formerly known as Dao Heng Bank Group Ltd.

“Among the US bank’s assets for sale, India (Assets in) stands out as the ‘Crown Jewel’,” Kwek wrote.

He added that the credit card business and Citibank’s wealth in India would be attractive to any bidder given the country’s economic growth rate and population size.

DBS is committed to generating more sales outside of its home region. Singapore remains the largest contributor to DBS sales, accounting for 70% of DBS’s total profit of SGD 4.7 billion in 2020, with Hong Kong accounting for the remaining 20.4% and mainland China / Taiwan 3.6% , 2.2% from South and Southeast Asia and other regions around the world 3.5%.

When asked about his interest in selling Citibank’s assets, Gupta said that DBS was very disciplined in the takeover and would not get involved in the “bidding frenzy”.

Citibank plans to exit retail banking in 13 markets in Asia, Europe, the Middle East and Africa as part of a strategy from CEO Jane Fraser, which the group acquired in March.

In April, DBS announced it would pay S $ 1.1 billion for a 13 percent stake in Shenzhen Rural Commercial Bank Corp. China and Gupta have expressed an interest in increasing the stock.

Bernstein analysts estimate the total budget for acquisitions this year will include S $ 4 billion spent on Chinese banks, bringing DBS Bank’s overall Tier 1 equity ratio from 14.3% on March 30 to Jan. , Would decrease 1%.

“While the number is still above the regulatory minimum, it could have an impact on the company’s dividend payments for 2021,” said Kwek.

“But to be fair, earnings momentum looks promising this year and management rhetoric is likely to return later in revenue and later higher payouts,” Kwek said.

“Investors should ask themselves: what can DBS do better than Citi?”

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