Despite a plan to increase the scale of its business in Taiwan this year, the local unit of HSBC Holdings Plc said yesterday that it is not considering expansion through merger and acquisition (M&A) of local banks.
"We don't have any M&A plans for the moment," Paul Leech, president and chief executive officer of HSBC Taiwan, told a media gathering yesterday.
The government is trying to improve the banking sector by promoting mergers between banks. But HSBC Taiwan said it would prefer to acquire 100 percent of ownership if there have to be M&A activities, Leech said.
There has been speculation in the market that HSBC was in talks with Far Eastern International Bank (遠東商銀) in order to expand from its current eight branches in this country.
A Chinese-language newspaper reported last November that Far Eastern Bank had signed a letter of intent with HSBC for an acquisition price of NT$26 to NT$34 per share. At the time, however, HSBC flatly denied the report.
In an interview with cable channel USTV at the time, Leech said the bank's priority was to serve Taiwanese businesspeople in China, not bring about a merger.
HSBC Taiwan serves around 3,000 China-based Taiwanese businesses at present -- out of a total of around 920,000 such companies -- according to the bank's head of commercial banking, Kenneth Cheng (鄭克家).
But the bank will also strengthen its services to Taiwanese corporations when these firms expand into other Asian markets, including Hong Kong and Vietnam, Leech said yesterday.
HSBC Taiwan posted a pre-tax income of NT$3.46 billion last year, an increase of 30 percent over 2003, with its personal financial services and corporate banking business growing 75 percent and 24 percent respectively.
As Taiwan is the fifth-most profitable market for HSBC in the Asia region, the bank is bullish about the outlook for the local market, Leech said.
He said the bank would continue making large investments in developing consumer products, recruiting up to 550 employees and raising its brand awareness to build its business base.
Martin Spurling, a senior vice president of personal financial services at HSBC Taiwan, said the bank expected to keep similar revenue growth in personal financial services compared with last year.
HSBC is the largest foreign bank in this country in the personal loan market. It has more than 700,000 credit cards out of an estimated 60 million cards in circulation.
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