Wed, Feb 02, 2005 - Page 11 News List

Land Bank celebrates 83 years

IPO PLANS The state-owned bank plans to be listed on the stock market later this year and then sell off more of the government's shares next year, perhaps overseas

By Joyce Huang  /  STAFF REPORTER

The Land Bank of Taiwan (土地銀行) is slated to go public in the third quarter of this year when it releases 13.5 percent of its government-owned shares onto the open market, with another 13.91 percent to be sold by year's end, said chairman Tsai Jer-shyong (蔡哲雄) said yesterday.

"After it is listed on the stock market later this year, the Land Bank will step up its efforts to consolidate through mergers and acquisitions," Tsai told a press conference yesterday.

After taking office last June, Tsai vowed to accelerate the state-owned bank's privatization, which had been scheduled for completion before next year, and its expansion into a mega-bank.

Tsai said he hoped to increase the bank's market share from 8 percent to "at least 10 percent" after the initial public offering (IPO) is completed later this year.

"We'll seek an opportunity to acquire a smaller rival bank, which has a minimum market share of 2 percent," Tsai said, adding that merger talks would only be possible when the bank has become a publicly-traded company.

Once the IPO is launched, the bank plans to release another 23.09 percent of shares next year in either the local or an overseas market, he said.

The government hopes to lower its holding in the bank to 49 percent next year.

Tsai said that he hopes to take advantage of the transition before overseas capital markets toughen up accounting standards by listing on London's stock market before 2007, even though London is one of the bank's target markets for trading its shares. The bank could also trade shares in Singapore's or Luxembourg's capital markets, he said.

Celebrating the bank's 83rd year yesterday, Tsai lauded that its success in writing off NT$10.97 billion in bad loans last year and lowering its non-performing loan (NPL) ratio by 1.16 percent to 3.41 percent as of last month.

He said the bank has become the nation's third-largest bank with more than NT$1.7 trillion in total assets. He promised to lower the bank's NPL ratio to below 2.5 percent by the end of this year while raising its coverage ratio from current 35.77 percent to 40 percent.

Tsai said the bank is planning to seek a strategic partnership with a multinational insurer in order to strengthen its financial services.

When asked if the bank will continue merger plans with the Central Trust of China (中信局) before expanding into a financial holding company, Tsai said that it "hasn't ruled out any possibilities."

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