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Cathay joins up with Chunghwa

Cathay Financial Holding Co vice chairman Gregory Wang, left, and Chunghwa Telecom chairman and CEO Hochen Tan hold up enlarged copies of promotional banners at a press conference yesterday to announce the business integration of the two companies. PHOTO: KAO CHAO-FEN, TAIPEI TIMES

Cathay Financial Holding Co (國泰金控), the nation's largest financial group by assets, yesterday announced it would form a strategic alliance with Chunghwa Telecom Co (中華電信) to facilitate real estate development and business integration.

Chunghwa Telecom currently owns 400 hectares of land nationwide. However, some of the land cannot be transferred for commercial use because of legal restrictions.

With the help of Cathay Financial's expertise and financial integration, the nation's largest telecom services provider hopes to activate these assets, Chunghwa Telecom chairman and CEO Hochen Tan (賀陳旦) said at a press conference yesterday, adding that no timetable was available for the initiative.

He said they would start joining forces on the property cases that were restricted by fewer urban planning regulations and had favorable geographical conditions for development.

Cathay Financial vice chairman Gregory Wang (汪國華) said his company planned to issue a real estate investment trust, or REIT, for Chunghwa Telecom, as the return rates on such investment products have been fairly stable.

"Rentals will continue to rise in the next two years, boosting values in the booming real estate sector. We're bullish on the sector and cooperation with Chunghwa Telecom will definitely be a long-term plan."

Gregory Wang, vice chairman of Cathay Financial

"Rentals will continue to rise in the next two years, boosting values in the booming real estate sector. We're bullish on the sector and cooperation with Chunghwa Telecom will definitely be a long-term plan," Wang said.

In return, Chunghwa Telecom will integrate its optical fiber and Internet services in the property projects Cathay Financial owns to increase values.

Cathay Financial now holds a 3.9 percent stake in Chunghwa Telecom, making it the telecommunications firm's largest private shareholder. The government owns a 41.2 percent stake in Chunghwa Telecom.

Wang expressed confidence in the telecom firm's outlook, saying that the financial holding company would increase its shareholding when opportunities come.

At yesterday's launch ceremony, the two companies said that the strategic alliance would allow Chunghwa Telecom's 8.5 million mobile users and 13 million landline phone customers and Cathay Financial's nearly 10 million clients to share a bigger pool of resources, after the two agreed on a deal to promote their products to each other's staff and clients.

For example, consumers who apply to pay phone bills using a Cathay Financial credit card will be able to redeem bonus points collected on the credit card to reduce their Chunghwa Telecom bills.

The two companies have also launched trial operations to enable mobile phones to double as credit cards under the "near field communication" (NFC) consortium, they said.
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