Shares of Far Eastern International Bank (遠東商銀) soared on the local bourse yesterday on market speculation that the lender was in merger talks with the British banking giant HSBC Ltd.
The company's shares closed limit-up at NT$12.75 (US$0.39) on the Taiwan Stock Exchange.
Chu Yu-chun (
The success of the possible deal would depend on the buyer's offer and agreements on preserving control by the current management, Chu said.
She however appeared pessimistic about the alleged partnership, citing uncertainties over spiraling consumer bad debts and regulatory risks due to the proposed lowering of interest rate caps and personal bankruptcy bill.
“If I were the buyer, I would not make the decision at this time, amid all these worries,” Chu said.
Far Eastern International on Monday posted pre-tax income of NT$366 million, or NT$0.20 per share, for the first quarter of this year, down from NT$1.01 billion, or NT$0.63 per share, a year ago.
The company, the banking arm of the Far Eastern Group (遠東集團), remained noncommittal about the alleged partnership yesterday.
"We have not reached an agreement with any financial institution" the bank said in a filing to the stock exchange. "We are open to and will not rule out any likelihood of external growth with the purpose of creating the most benefits for our shareholders."
HSBC Ltd's Taiwan branch yesterday said it had no comment on the market speculation.
Nevertheless, it was always looking for good opportunities for mergers and acquisitions, said Deborah Chang (
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