Tue, Jul 17, 2007 - Page 12 News List

Far Eastern mulls ceding control to grow in China

BLOOMBERG

Far Eastern International Bank (遠東國際商銀) said it would cede management control to a foreign strategic partner that could help it branch out to China.

"We need a foreign bank that can help us expand faster, especially in the Greater China region," Thomas Chou (周添財), chief executive vice president of the Taipei-based company, said in a telephone interview yesterday.

"We can let the partner have majority control of management if they can deliver the upside" he said.

The Chinese-language Economic Daily News reported yesterday that DBS Group Holdings Ltd, Singapore's biggest bank, could pay between NT$23 and NT$25 a share for part of the Taiwanese bank.

Far Eastern International's shares closed up close to the 7 percent limit at NT$18.80 yesterday.

Far Eastern International is "more serious" about one of the foreign banks it is talking to, Chou said, declining to identify which one.

None of the potential buyers has begun due diligence, he said.

DBS is "always on the lookout for organic and inorganic opportunities that are accretive to our shareholders and which extend our Asia banking franchise," company spokeswoman Eileen Shiang Yuen Lau said in an e-mail in which she declined to say whether the bank was in discussions with Far Eastern.

The Far Eastern Group (遠東集團), which controls Taiwan's largest textile company and has holdings in shipping, retailing and mobile-phone services, owns 17.5 percent of the bank, Chou said. Douglas Hsu (徐旭東) is chairman of the group and the bank.

Chou said Far Eastern has been in talks with foreign banks, including DBS, in the past two to three years.

A surge in bad credit and cash-card loans in the past two years hampered its efforts to sell a stake, he said.

Far Eastern, the island's 10th-largest credit-card issuer, has 35 branches in Taiwan and one in Hong Kong.

The Taiwanese government doesn't allow its banks to open branches in China, citing the absence of a two-way supervisory mechanism.

This story has been viewed 2488 times.

Comments will be moderated. Remarks containing abusive and obscene language, personal attacks of any kind or promotion will be removed and the user banned.

TOP top