Thu, May 22, 2003 - Page 11 News List

SinoPac wants Grand Commercial

BLOOMBERG , TAIPEI

SinoPac Holdings Co (建華金控), which has the second-highest percentage of overseas shareholders among domestic lenders, said it's bidding for Grand Commercial Bank (萬通銀行), a lender controlled by the nation's largest food company.

"Our chairman has often said that scale is very important," said Lee Mei-ling (李玫玲), a public relations specialist at SinoPac who declined to provide more details.

The bid was earlier reported by a local newspaper.

Domestic lenders are seeking merger and acquisition targets as the government pushes for consolidation in the industry. More than 50 banks and 300 community credit associations are competing for business in the country.

"The takeover can boost sales channels and assets for potential buyers, especially Far Eastern International Bank (遠東銀行), which is the smallest among the four, when the Taiwan bank sector is consolidating," said Rayson Heung, a banking analyst at HSBC Securities Asia Ltd in Taiwan.

Grand Commercial, which is about 35 percent-controlled by Uni-President Group (統一集團), is seeking merger and acquisition targets to boost its size and competitiveness, said senior executive vice president Steven Lin (林榮茂). No agreements have been signed, he said.

Grand Commercial, which has a total of 44 branches nationwide, is an attractive investment because of its network of automated teller machines in 7-Eleven shops, run by affiliate President Chain Store Corp (統一超商), the nation's biggest convenience store operator.

The bank plans to increase the number of machines to 1,250, more than double from the existing 559, said Lin.

Grand Commercial, in talks with foreign buyers such as ABN Amro Holding NV as early as 2001, has halted those discussions, said Lin. Lehman Brothers Holdings Inc had helped to coordinate the talks.

SinoPac is competing with Chinatrust Financial Holding Co (中信金控), Taishin Financial Holding Co (台新金控) and Far Eastern Bank, which have been invited by Grand Commercial for further discussions, the newspaper reported, citing no one.

"Chinatrust is interested in local banking merger and acquisition opportunities as we believe we can bring more value to the seller and our shareholders given we are the most profitable bank in past two to three years," said Chinatrust spokesman Ling Shiaw-pin (林孝平), who declined to elaborate.

Far Eastern spokesman Julius Chen (陳國聯) said he did not know whether the bank was involved in the sale of Grand Commercial Bank, yet the bank's direction is "to look for merger and acquisition targets to build up our size and scope."

Taishin spokeswoman Carol Lai (賴昭吟) was not available for comment.

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