Taishin bids for another merger

Taishin International Bank (台新銀行), the nation's second-biggest issuer of credit cards, has decided to acquire Chunan Credit Coopera-tive (竹南信合社) in Miaoli County, as it tries to increase its customer base and boost market share.

Taishin Financial Holdings Co (台新金控), the parent company of the lender, revealed the proposed buy-out on Friday in a statement to the Taiwan Stock Exchange Corp.

The statement said the lender's board approved the merger plan earlier that day and it will need the approval from its shareholders at a meeting in June.

Currently, Taishin International is conducting due diligence procedures on Chunan Credit. Following the acquisition, effective July 1, Taishin International is expected to boost its network of 101 outlets to 109.

Chinatrust Commercial Bank (中信銀行) remains the nation's largest commercial lender in terms of branch numbers. The lender increased its branches to 110 in July last year, after it acquired Fengshan Credit Cooperative (鳳山信合社) in Kaohsiung County for NT$1.1 billion.

The statement to the stock exchange did not specify how much Taishin International would like to pay for the cooperative, suggesting the deal is still being negotiated among the two. But a Chinese-language newspaper reported on Saturday that Taishin International would close the deal at NT$1 billion.

Taishin Financial spokesperson and chief financial officer Carol Lai (賴昭吟) wasn't available yesterday for comment.

But Lai told the Chinese-language Liberty Times on Friday that both Taishin International and Chunan Credit would take the fullest consideration of the best interests of their shareholders, employees and customers before finalizing the merger.

Chunan Credit is a small local credit cooperative that recruits 150 employees and has 8 branches in Miaoli area. It is currently under the chairmanship of Wong Kun-hui (翁焜輝). With a net worth of NT$1.43 billion, Chunan Credit has a capital adequacy ratio of 8 percent, with a non-performing loan ratio last year lower than 2 percent.

The planned merger with Chunan Credit is the latest development move that Taishin International has made in the last nine months. Last July, the lender agreed to pay NT$1.4 billion to acquire small rival Hsinchu Tenth Credit Cooperative (新竹十信), boosting its number of branches from 89 to 101.

The Taipei-based financial service provider has said it will continue expansion through mergers and acquisitions, as buying local credit cooperatives indeed offers a cheap and efficient way of expanding its market presence.

Earlier this month, Taishin Financial expressed interest in merging with local or foreign life insurance companies to strengthen its product lineup while improving profitability.

Taishin Financial shares dropped NT$0.05, or 0.17 percent to NT$30.10 on the Taiwan Stock Exchange last Friday.