Tue, Jul 06, 2004 - Page 10 News List

Chinatrust's bid wins Fengshan Credit

FAILED COOPERATIVE Chinatrust outbid six other banks in yesterday's auction by the Central Deposit Insurance Corp, a move that will up the number of its branches

By Joyce Huang  /  STAFF REPORTER

The Central Deposit Insurance Corp (CDIC, 中央存保) yesterday auctioned off the debt-ridden Fengshan Credit Cooperative (鳳山信合社) in Kaohsiung County for NT$1.1 billion to the Chinatrust Commercial Bank (中信銀), a banking arm of Chinatrust Financial Holding Co (中信金控).

Chinatrust bank outbid six other competitors, the CDIC confirmed in a written statement.

CDIC president Johnson Chen (陳戰勝) hailed the success of the auction, saying it was a good deal for the Financial Restructuring Fund (金融重建基金) -- which will provide Chinatrust Commercial Bank with the NT$1.1 billion for its bid -- to help recover Fengshan's NT1.9 billion in debts.

Chen said that the deal is a good bargain for Chinatrust since it will be allowed to increase its number of branches within the next five years.

Chinatrust will also be allowed to relocate six of Fengshan's branches Kaohsiung to other cities and counties as part of its expansion plan, Chen added.

According to the CDIC, Feng-shan now operates eight outlets in Kaohsiung County and has rights to re-open two of its branches.

Chinatrust also expressed satisfaction with the auction, saying that the deal will help increase its branches from 101 to 110. Each branch costs between NT$80 million and NT$120 million.

Chinatrust will also be allowed to relocate the Fengshan's remaining four outlets in Kaohsiung County, the bank said.

In early April, the CDIC took over Fengshan, which has capital of NT$300 million and reported a 50 percent non-performing loan (NPL) ratio as of March, after it posted a negative net assets of NT$1.9 billion.

The Financial Restructuring Fund was set up in 2001 to help clean up bad loans and dispose of failed banks.

In May, the CDIC disposed of the Kaohsiung Business Bank by using fund to pay NT$13.4 billion to E.Sun Commercial Bank (玉山銀行), a unit of E.Sun Financial Holdings Co (玉山金控), to help recapitalize the bankrupt lender.

SinoPac Holdings Co (建華金控), Jih Sun Financial Holdings Co (日盛金控), Taishin Financial Holdings Co (台新金控), Union Bank of Taiwan (聯邦銀行), Macoto Bank (誠泰銀行) and Sunny Bank (陽信銀行) also took part in yesterday's auction.

This story has been viewed 3440 times.

Comments will be moderated. Remarks containing abusive and obscene language, personal attacks of any kind or promotion will be removed and the user banned.

TOP top