Fuhwa Bank slated to put credit card unit on selling list

Fuhwa Bank (復華銀行), an affiliate of the Fuhwa Financial Holding Co (復華金控), may put its credit card unit up for sale to improve profitability, the Central News Agency reported yesterday, without saying where it obtained the information.

The report said Shin Kong Commercial Bank (新光銀行) may be interested in buying Fuhwa's credit card unit in a bid to help boost the number of its credit card users. But other bigger rivals showed lackluster interest in the deal.

Business plans

Shin Kong Bank, which changed its name from United-Credit Commercial Bank (聯信銀行) in December last year, currently has less than 300,000 credit cards in circulation.

Apart the bid to acquire the Fuhwa credit card unit, Shin Kong also hopes to issue co-branded credit cards with Shin Kong Mitsukoshi Department Store (新光三越) to have more than one million cards in circulation this year, according to the report.

As of the end of January, Fuhwa had issued some 500,000 credit cards, securing a tiny 1.32 percent market share in Taiwan. The non-performing loan ratio for the lender's credit card business remained at around 2.55 percent at the time.

The number of credit cards in circulation totaled 37.92 million at the end of January, according to statistics provided by the Bureau of Monetary Affairs under the Financial Supervisory Commission.

Players

The major players in the credit card business include Chinatrust Commercial Bank (中國信託商銀), Taishin International Bank (台新銀行), Cathay United Bank (國泰世華銀行), Union Bank of Taiwan (聯邦銀行), E Sun Commercial Bank (玉山銀行) and Taipei Fubon Bank (台北富邦銀行), with more than two million cards in circulation each.

The report cited Union Bank marketing manager Chen Mei-ji (陳明智) as saying that the lender has no intention to bid for Fuhwa's credit card business. Chen said both Union Bank and Fuhwa are similar in their customer structure and he doesn't expect that buying Fuhwa's credit card unit will effectively expand his bank's customer base.