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Citibank completes BOOC acquisition

Citibank Taiwan Ltd (花旗台灣) yesterday completed its acquisition of the Bank of Overseas Chinese (華僑銀行), boosting its local branch network from 11 to 66 when it opens for business tomorrow.

The acquisition, made at a total cost of NT$13.9 billion (US$427 million) or NT$11.63 per share, adds 1 million new clients to the foreign-turned-local bank, while boosting its number of employees from 3,500 to 5,600, chairman Morris Li (利明獻) said at a launching ceremony yesterday.

"Citi [Taiwan] will post NT$10 billion in net profits this year, which will probably be the highest among all banks here," said Li, who is also Citi Taiwan's country officer.

"Following today's integration, we aim to create more growth next year," he said, without elaborating.

In the consumer banking business, Citibank Taiwan aims to boost its revenue to US$5 million next year, said Simon Chung (鍾國強), head of global commercial banking, before the launch yesterday.

The bank also vowed to strengthen services to its 7,000 new small and medium enterprise (SME) clients from BOCC by setting up nine SME corporate centers nationwide to provide tailor-made credit and financial services.

One of the bank's branches will focus on serving big corporate banking clients, while the 66 branches will focus on providing retail and SME corporate banking services. Financial Supervisory Commission Vice Chairwoman Susan Chang (張秀蓮), a guest at yesterday's ceremony, called it an "unprecedented" business model allowing the bank more flexibility in conducting business.

Stephen Bird, the Hong Kong-based CEO of Citi's global consumer group in Asia Pacific, said yesterday that the merger had created a win-win situation as new customers could benefit from its global network.

Robert Morse, another Hong Kong-based CEO in charge of Citi's markets and banking in Asia Pacific, said he looked forward to meeting corporate clients' credit and financial needs as the global bank's services in greater China are "unparallel."

However, Morse was mum on whether the bank was planning any other acquisition deals. Citibank Taiwan still lags behind Standard Chartered Taiwan, which has 86 domestic branches after acquiring Hsinchu International Bank in July.

But he said that the bank, undaunted by parent US Citigroup's subprime losses, has been committed to tapping investment opportunities in the Asia Pacific region since 1902 as the region has been a growth generator for the global bank.

Revenues in Asia Pacific year-to-date reached US$3.6 billion and net income during the period totaled US$1.14 billion, a 51 percent year-on-year growth.

"Our ambition in Asia remains very high," he said.

Citigroup founded its branch in Taiwan in 1965 and entered the Chinese market in 1983.
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