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New York Life inks deal with local bank

President and CEO of New York Life Insurance Taiwan Corp Dan Ting, left, chief executive of New York Life's Asia region David Skinner, second left, chairman of Polaris Financial Group Wayne Pai, second right, and president of the Bank of Overseas Chinese Mike Chang hold up an agreement forming a strategic alliance yesterday. PHOTO: KAO CHAO-FEN, TAIPEI TIMES

The formerly loss-making lender the Bank of Overseas Chinese (華僑銀行) was given another shot in the arm yesterday when it formed a strategic alliance with New York Life International to develop bancassurance business.

Bancassurance is a combination of banking and insurance services.

After eight months of negotiations, the US' largest mutual insurance company decided to invest US$20 million in the local lender, gaining a 5 percent stockholding.

"I see much potential in protection products [in Taiwan]?[because] there is a tremendous amount of the population that is under-insured for life, accident and retirement services. It's a perfect time to do a strategic alliance with the Bank of Overseas Chinese," David Skinner, chief executive of New York Life International's Asia region, told the Taipei Times on the sidelines of a signing ceremony in Taipei yesterday.

The deal marked the domestic banking sector's second strategic alliance with an overseas operator after the UK's Prudential Plc invested in E.Sun Financial Holding Co (玉山金控) early last year.

Wayne Pai (白文正), chairman of Polaris Financial Group (寶來集團), the biggest shareholder of Bank of Overseas Chinese, praised the deal for pumping new blood into the bank.

"Via the deal, Bank of Overseas Chinese can introduce not only New York Life's capital, but also the reputation of a century-old multinational and established professional system, talent and know-how. In the long term, the cooperation will also drive up Polaris Financial's credit rating and boost its international exposure," he said.

Pai said that in the following months, the group's over 100 branches nationwide -- including 55 belonging to the bank -- will start selling bancassurance.

The group hopes this business segment will account for 30 percent of the bank's revenues in three years.

Elaborating on the lender's plans, bank president Mike Chang (張嵩峨) said it will focus more on the fee-income segment, and expects to expand into the pension fund and asset management markets.

The bank estimated that the deal will boost its operating performance, strengthen internationalization and facilitate the development of new products.

Since Polaris Financial became the Bank of Overseas Chinese's largest shareholder in December last year, raising its stockholding to a controlling 46 percent, the bank has undergone recapitalization and moved into the black in May, recording profits of NT$53 million (US$1.6 million).

The lender expects its non-performing loan ratio for last month to decline to 2.42 percent.

Skinner said that the focus of New York Life's efforts for the time being is to develop its cooperation with Bank of Overseas Chinese. It has no plans to invest in or merge with other Taiwanese companies, he said.
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