When it came to DBS Group‘s decision to acquire Citigroup’s Taiwan assets, Piyush Gupta, CEO of the Singapore-based banking group, said geopolitics was «perhaps the single largest question that our board wrested with.»

On Friday, DBS announced it agreed to acquire Citigroup’s consumer banking business in Taiwan, paying cash for the net assets plus an additional S$956 million, as finews.asia also reported.

Taiwan’s status has long generated tension with mainland China, which claims the island is part of its territory. However, Taiwan has governed itself independently since 1949, while threading a small diplomatic needle on whether it is independent of the mainland. Tensions periodically flare, with concerns China may eventually use force to assert its claim.

Meaningful Contributor

To be sure, DBS already has operations in Taiwan, which it calls a «meaningful contributor» to its earnings, Singapore-based news website «Shenton Wire» reported. Gupta said DBS’ base case is that China will need to continue to work with Taiwan, and the mainland’s approach will be similar to how it approaches Hong Kong.

«It will be in synchronous, it will be non-violent, and it will be influenced-based over a period of time,» Gupta said in a press conference Friday. «We are basically certain [or] do not expect the possibility of any armed moves any conflict in the course of this decade.»

Violent Protests

Gupta noted that Hong Kong has continued to prosper economically even as it remained within China’s one country-two systems framework.

To be sure, Hong Kong has faced violent protests and crackdowns in recent years over how China has approached the protectorate, and amid concerns civil liberties there have been steadily eroding.

Critical For Everybody

The Council on Foreign Relations reported in mid-2021 that opinion polls in Taiwan show most Taiwanese reject the idea of a one country-two systems model, particularly after seeing it play out in Hong Kong. But Gupta said his bank believed the possibility of armed conflict was remote.

«Taiwan is critical for everybody, including China, in terms of its technology prowess and the chip capacity,» Gupta said. «Our general view is that, given where we are in the bank, that is an acceptable and meaningful risk for us to take.»