Fubon sets sights on state-run lenders

Fubon Financial Holding Co (富邦金控), the nation's second largest financial services provider by assets, is eyeing state-owned lenders to further expand its banking business, a company official told reporters.

The financial institution's remarks came amid several moves toward consolidation in the financial sector. Shinkong Financial Holding Co's (新光金控) takeover of Macoto Bank (誠泰銀行) in a NT$20 billion deal last week was the latest example.

More branches

"We'll consider acquiring banks that have a large number of outlets -- to expand our service network -- when seeking the next merger target for Taipei Fubon Commercial Bank (台北富邦銀行)," Fubon Financial spokesman Victor Kung (龔天行) told reporters on Saturday.

The holding company confirmed its intention to acquire state-run financial institutions in a phone interview with the Taipei Times yesterday.

"Fubon Financial will seriously evaluate [the possibility of buying] state-run banks," Kung said.

Fubon Financial would make an offer for Chang Hwa Commercial Bank (彰化銀行) if that bank fails to find an overseas investor, Kung said.

Reports that bids for Chang Hwa Commercial Bank's global depositary receipt issuance had fallen short of the market price of the company's shares sparked market speculation that it had failed.

Changhwa Commercial Bank said it is scheduled to announce the result this week.

Kung said his company has an advantage over its rivals in terms of experience in absorbing state-run lenders, citing its integration of Taipei Bank (台北銀行) -- previously controlled by Taipei City Government -- into Fubon Commercial Bank (富邦銀行) in 2002.

Other potential targets include the Business Bank (台灣企銀), Bank of Taiwan (台灣銀行), Taiwan Cooperative Bank (合作金庫) and Lank Bank of Taiwan (土地銀行), according to a local Chinese-language newspaper which cited what it said were reliable sources.

Fubon Group chairman Tsai Wan-tsai (蔡萬才), speaking about ideal candidates, said: "We hope to buy large-scale banks with complementary businesses [to Taipei Fubon Commercial Bank]."

Taipei Fubon Commercial bank currently operates 121 branches around the nation.

First Financial

Previously, Fubon Financial had expressed strong interest in acquiring smaller First Financial Holding Co (第一金控), which is controlled by the government, but the proposal was turned down by First Financial's former chairman, Steve Shieh (謝壽夫).

Sheih's departure earlier this month, however, re-ignited Fubon Financial's hopes of a merger.

On Saturday, Fubon Financial chairman Daniel Tsai (蔡明忠) called on the government to sell off its holdings in state-run financial institutions through public biddings.

Tsai's suggestion came amid rising speculation that the government plans to integrate First Financial Holding with another state-owned company, Hwa Nan Financial Holdings Co (華南金控).

Shares of Fubon Financial rose 0.35 percent to close at NT$29.05 last Friday on the Taiwan Stock Exchange.