Chinatrust discusses plans

Outlining its merger and acquisition (M&A) plans, Chinatrust Financial Holding Co (中信金) officials said yesterday that branch expansion remains the bank's main strategy.

"Given the government's current policy of freezing the establishment of new branches, we may need to expand our network via M&As," Chinatrust Chief Strategic Officer,Lin Shiaw-pin (林孝平) said during a press conference.

With 57 branches in Taiwan, Chinatrust officials did not specify how many more branches they hoped to acquire.

Chinatrust is looking to expand to better compete with Cathay Financial Holding Co (國泰金控) and Fubon Financial Holding Co (富邦金控), the nation's two largest financial services companies, which both announced acquisitions this month.

Cathay is taking over United World Chinese Commercial Bank (世華銀行) and Fubon is purchasing Taipei-Bank (台北銀行).

Chinatrust recently a placed a bid on financially troubled Chung Shing Commercial Bank (中興銀行), competing with Cerberus Asia Ltd, a foreign asset management company.

Chinatrust lost a bid to acquire TaipeiBank to Fubon in early August.

Chinatrust President Jeffrey Koo Jr. (辜仲諒) said media speculation about another possible acquisition were false.

"Chinatrust has not engaged in any discussions with SinoPac Holding Co [建華金控] about a takeover plan," Koo said.

"It's an endless game and size doesn't mean everything. Expanding market share within the next two to three years is more important," Koo said.

The company will never over pay just to secure a partnership or expand the company's size, he said.

But Chinatrust has not ruled out any possibilities, including forging a strategic alliance with a Europe-based insurance company to start marketing insurance products or setting up securities houses within the branches, Koo said.

"The goal of NT$30 billion in profits by 2004 will be met," Koo said.

Chinatrust forecasts having an after-tax profit of NT$12.2 billion this year. The company hopes to have an earning per share (EPS) of NT$2.67 by year's end.

The merger between Fubon and TaipeiBank is predicted to create an EPS of NT$2.02 and the merger between Cathay and United World Chinese Commercial Bank is expected to create an EPS of NT$0.66 this year.