SinoPac Holdings Co (建華金控), the most popular Taiwanese financial company among foreign investors, said it plans to double profit to NT$9 billion within three years through mergers and acquisitions.
The holding company, formed this year from a merger of Bank SinoPac (華信銀行) and National Securities Corp (建弘證券), also aims to raise its return on equity to 12 percent by 2005 from about 9 percent, senior executive Kevin Peng said in a telephone interview.
"Securing a bigger client base coupled with proprietary trading and underwriting income can easily boost earnings," Peng said. "We want to keep contribution from the bank and brokerage at least 50-50, though raising banking earnings to 60 percent will be more comfortable, because of the volatility of stock trading."
Taiwanese lenders, competing in a market of about 50 banks and more than 300 community-level lenders, are seeking to buy rivals or be taken over by bigger financial companies to expand and compete more effectively in the island's increasingly liberalized market.
SinoPac Holdings plans to join with a bigger rival or take over another financial services company by the end of next year, Peng said, confirming an earlier Chinese-language newspaper report.
SinoPac also plans to buy as much as 40 percent of Shanghai-based First Sino Bank once rules permit, the newspaper also said, citing SinoPac president Paul Lo (盧正昕). First Sino is a venture between an investment vehicle of Taiwan shoemaker Pou Chen Corp's (寶成) chairman and Shanghai Pudong Development Bank Co (上海浦東銀行), a Chinese lender.
SinoPac's US unit has an alliance with First Sino and has rights to buy shares in the venture, Peng said, declining to say how much it will buy.
SinoPac Holdings, about 35 percent held by foreign investors, in July said it expected to earn about NT$4.5 billion for the whole of this year, on a consolidated basis. The actual reported figure will be lower because the financial statement will only include earnings starting May 9, the date SinoPac started trading following its reorganization into a holding company structure.
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