Chinatrust Financial Holding Co (中信金控) will form a credit card joint venture in Thailand with the Government Savings Bank (GSB) next year, the company said late yesterday.
Chinatrust Financial plans to invest US$36.52 million for the next three years in the joint venture, in which it will control a 49 percent stake, to run a credit card and consumer lending business, the company said in a filing to the Taiwan Stock Exchange yesterday.
The joint venture is slated to begin operations in the third quarter of next year and is expected to gain a 6 percent share of Thailand's consumer lending market within the next five years. Approval by financial regulators in both countries is still pending.
The Financial Supervisory Commission in June banned Chinatrust Financial's overseas investment plans after the misuse of funds by its banking arm in the takeover of Mega Financial Holding Co (兆豐金控).
"We reported to the commission beforehand and obtained their blessing," Chinatrust Financial spokesman Jason Wang (王正新) said yesterday.
The commission said that the application appeared to have been made before the penalties were imposed and that it was inclined to give the green light.
Meanwhile, Chinatrust Commercial Bank (中國信託銀行) decided to set aside an extra NT$6.33 billion (US$194.17 million) to cover potential losses from restructured credit and cash card loans and NT$1.64 billion for high-risk housing mortgage defaults, it said.
The extra reserves could boost the bank's provision costs to more that NT$47 billion this year.
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