Thu, Feb 16, 2006 - Page 10 News List

SinoPac refocuses on overseas plans

By Amber Chung  /  STAFF REPORTER

SinoPac Financial Holding Co (建華金控), the nation's eighth-largest financial services provider, said yesterday that it will focus on expanding its overseas operations, as Taiwan's financial regulator have vowed to turn local financial institutions into competitive regional players.

"The competition in the small home market is growing increasingly keen, especially as lenders are switching to the traditional banking business in droves in the face of consumer bad loans," SinoPac chief executive officer (CEO) Paul Lo (盧正昕) told a press conference yesterday.

The company will refocus on expanding its overseas operations in banking and securities and increasing the contribution of its overseas profits to total earnings to 30 percent within the next two to three years, up from some 25 percent last year, Lo said.

SinoPac Financial wants to double its earnings to NT$10 billion (US$3.09 billion), or around NT$1.39 per share this year from NT$5.74 billion, or NT$0.81 per share last year, the company said.

Targeted foreign markets include Hong Kong, Vietnam and Macao, where there are many overseas Taiwanese corporate investors, SinoPac Financial's deputy CEO Yu Kuo-chih (游國治) said.

The financial group has 900 employees in its 28 outlets around the world.

SinoPac Financial's expansion across the Taiwan Strait would depend on the relaxation of the government's China policy, Lo said.

However, SinoPac Financial's subsidiaries, SinoPac Securities Corp (建華證券) and the US-based Far East National Bank, have set up representative offices in Shanghai and Beijing.

The government has vowed to consolidate the fragmented finance sector by halving the number of financial holding firms to seven by the end of this year and to help create one to three national champion banks which can compete with foreign rivals in the region.

SinoPac Financial took over the International Bank of Taipei (台北商銀) at the end of last year, thereby moving up one notch to replace Taishin Financial Holding Co (台新金控) as the nation's eighth-largest financial group, with NT$1 trillion in assets.

Mergers and acquisitions are an added positive for SinoPac Financial, said Morgan Stanley, which gave an overweight rating to SinoPac Financial and holds its shares in portfolios, in a report released yesterday.

The brokerage expects to see consolidation in Taiwan's banking sector, as Taishin Financial's share sale to Newbridge Capital Inc of the US and Nomura Group of Japan earlier this month and Chinatrust Financial Holding Co's (中信金控) plans to acquire a stake in Mega Financial Holding Co (兆豐金控) will create the potential for some corporate activities, the report said.

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