Far Eastern International Bank confirms DBS talks

Far Eastern International Bank (遠東國際商銀) said it is seeking a "strategic alliance" with a "world-class" financial company and that it's been in talks with Singapore's DBS Group Holdings Ltd.

While discussions with DBS have been taking place for the past two to three years, "no conclusion has been reached," the company said in a statement to the Taiwan Stock Exchange on Thursday. Far Eastern is the banking arm of Far Eastern Group (遠東集團), which controls the nation's largest textile company and has units in shipping, mobile-phone services and retailing.

Far Eastern didn't define "strategic alliance" or say if it seeks partnerships only with overseas banks. Neither did it provide more details on its talks with DBS.

The government has encouraged mergers and acquisitions in the financial sector to reduce the number of banks in the nation. Far Eastern said in June that it was in initial talks with potential buyers, and in October said it may sell a majority stake for the right price.

The bank's shares surged up to the daily limit on Jan. 25 after a news report said it may sell a 51 percent stake to ABN Amro Holdings NV, which Far Eastern denied.

Shares of Far Eastern declined by 0.83 percent to close at NT$17.9 on the Taiwan Stock Exchange on Wednesday.

The company's statement yesterday came after the Chinese language Commercial Times reported that DBS may buy a stake in the the bank after completing a due diligence.

"It's our policy not to comment on market speculation or M and A activity," Jenny Lee, a DBS spokeswoman said in a phone interview.

Far Eastern, one of 16 lenders established in the early 1990s after the government liberalized the banking industry.