Tue, Aug 31, 2004 - Page 10 News List

First Holding seeks foreign investment

FIRST FINANCIAL The holding company's new president said he intends to attract more foreign shareholders through a restructuring

By Amber Chung  /  STAFF REPORTER

First Financial Holding Co (第一金控), Taiwan's third largest financial holding company, is considering boosting foreign ownership to 30 percent over the next three years, a company executive said yesterday. Foreign investor holdings in the company currently stand at around 15 percent

First Financial hopes to lure foreign investment through companywide restructuring, First Financial's new president Chao Yuan-chi (趙元旗) said at a press conference.

"One of my major tasks is to strengthen communication with foreign investors in many aspects, including restructuring and writing off the bad loans," said Chao, who formally took the helm yesterday.

As of the end of June, First Financial had a non-performing loan (NPL) ratio of 2.32 percent, according to government figures. "Our NPL figure looks decent and we hope to improve the figure of return on assets [ROA] to over 1 from current 0.9," Chao said.

Several financial holding firms in Taiwan that enjoy both bright performance and financial transparency have attracted foreign investors, and have foreign shareholdings of between 30 percent and 50 percent, Chao said.

He didn't specify which companies he was referring to.

Currently, foreign investors holding shares in First Financial include JP Morgan Chase Bank and Deutsche Bank, according to the company's spokesman Huang Hsieh-chuan (黃獻全).

Chao, 55, served as president of both China Development Financial Holding Corp and China Development Industrial Bank (中華開發工銀) last year, and executive vice president of Dah An Commercial Bank (大安商銀), which merged with Taishin International Bank (台新銀行) in 2002.

While being grilled by the press over speculation about a merger between First Financial and Taishin Financial Holding Co (台新金控), Chao yesterday reiterated that the company has no merger and acquisition (M&A) plans within the next two years.

"Consolidation ? that could lead to advantages in economies of scale is an inevitable trend," Chou said, "but my major job is to assist the chairman [Steve Shieh (謝壽夫)] in implementing the restructuring [of First Commercial Bank (第一銀行)], not M&A deals."

The restructuring of the financial holding company's banking arm is aimed to make it competitive not only with local but foreign banks here such as Chinatrust Commercial Bank (中信銀) and Fubon Bank (富邦銀行), he added.

Chou likened himself to a "missionary" in facilitating the reorganization by communicating with staffers and the union.

Developing synergies among the holding company's subsidiaries, including First Taisec Securities (一銀證券), Mingtai Fire & Marine Insurance Co (明台產險) and National Investment Trust Co (建弘投信), would be one of his major tasks as well, Chao said.

For the first half of the year, First Financial reported audited net income of NT$6.09 billion, or NT$1.1 per share, while its 193-outlet banking unit, First Commercial Bank, posted audited net income of NT$5.87 billion, or NT$1.27 per share.

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