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Mega Financial has mega plans

Mega Financial Holding Co (兆豐金控), the nation's second-largest financial holding company by assets, said it plans to boost its market position in consumer banking through mergers and acquisitions.

"We'll try to boost Mega's market share by mergers. The result will come in the foreseeable future," Mega president Lin Tzong-yeong (林宗勇) told an investor conference yesterday.

Mega has around 10 percent of the consumer-banking market, compared to its more than 20 percent market share of investment banking.

"It's a step Mega must do as consumer banking has replaced corporate banking as a major force to drive profitability for financial holdings in the past two years," said William Fong (方偉昌), an analyst with Primasia Securities.

Mega's performance in the consumer banking sector has been quite good this year, Fong said. But the firm has set out plans to buy smaller commercial banks or asset management companies here.

Far Eastern International Bank (遠東銀行) and Cosmos Bank Tai-wan (萬泰銀行) should serve as good choices for Mega, Fong said.

"Commercial banks and asset investment companies will top our priorities. Life insurers will also be an option," said Joseph Shieh (謝劍平), Mega's executive vice president.

Credit-card lending and housing loans soared by 31.44 percent in the first nine months to a combined NT$108.87 billion, compared to NT$82.83 billion last year, according to the company.

Shieh hopes Mega will aggressively boost its market position in consumer banking to around 20 percent within three to five years.

But Mega's ambition is more than expanding its consumer banking business. The company also has the ambition to make inroads in the China market.

Lin said Mega is mulling acquiring a Hong Kong bank to get earlier access to the China market after Beijing signed the Closer Partnership Agreement with the territory in June.

"We share the same concerns as Fubon. It's just too slow to wait for approval to set up branches in China to provide financial services to Taiwanese businessmen with factories in China," Lin said.

Fubon Financial Holding Co (富邦金控) signed an agreement with Arab Banking Corp in September to buy the 55 percent-stake the latter held in the Hong Kong-based International Bank of Asia (港基銀行).

Mega raised its financial forecast for this year to NT$18 billion in profit from NT$15 billion estimated previously.

The revised earnings per share rose to NT$1.85, up from NT$1.53. Mega earned NT$6.3 billion last year.

Declining to give his projection for earnings growth for next year, Lin assured investors that growth will continue.

Mega still has NT$25 billion unrealized profits, he said.
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