Mon, Nov 08, 2004 - Page 10 News List

Far Eastern Bank possibly seeking a merger partner

STAFF WRITER

Far Eastern International Bank (遠東銀行) was in possible merger talks with an unidentified bank on Saturday, Douglas Hsu (徐旭東), Far Eastern's chairman, told reporters over the weekend.

On the sidelines of a business forum held in Shanghai, Hsu said the Taipei-based lender was talking with another lender in the city. He didn't say who the possible merger partner was.

Local media have been speculating over the past few weeks that Far Eastern Bank may be in talks with HSBC Holdings Plc on a possible tie-up.

A Chinese-language newspaper reported early last week that Far Eastern Bank has signed a letter of intent with HSBC for an acquisition price of NT$26 per share to NT$34 per share.

Hsu declined to comment on the speculation, simply saying that "we have many candidates for cooperation ... Nevertheless, it's a bank versus bank [talk]."

HSBC flatly denied the speculations. Paul Leech, chief executive officer of HSBC Taiwan, told local cable channel USTV last week that the priority for the bank at the moment is to serve the needs of Taiwan businesspeople in China, not a merger.

Far Eastern Bank is part of the Far Eastern Group, which also has operations in textile, petrochemical, cement, telecommunications and department-store businesses.

Driven by strong growth in the consumer banking business, Far Eastern Bank reported NT$2.57 earnings per share for the first 10 months this year. But just like many mid-tier banks around the world, the lender is facing increasing pressure from the trend of intra-regional outsourcing.

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