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Banks interested in buying debt-ridden Bowa Bank

Three banks have expressed a strong interest in purchasing the debt-ridden Bowa Bank (寶華銀行), said Howard Wang (王南華), president of Central Deposit Insurance Corp (中央存保), which took over Bowa last August.

However, Wang said a report in the Chinese-language Economic Daily that the Development Bank of Singapore (DBS) is among the three bidders for Bowa was "pure speculation."

The Economic Daily said that a local financial holding firm and a local bank were also potential bidders at the Bowa auction. He also declined to comment on this.

Wang said three qualified banks have expressed a strong intention to buy Bowa's banking operations, with the result of the auction to be announced on Jan. 31.

The three banks are looking to purchase only the "good" part of Bowa, which does not include the non-performing loans, Wang said.

He said Bowa's non-performing loans (NPL) have attracted eight bidders. The bank has a total of NT$24 billion (US$742 million) worth of NPLs, of which NT$4 billion are not warranted.

Bowa owns 39 branches in Taiwan and owns 42 licenses for its banking operations, CDIC data showed.

Bowa Bank confirmed that representatives from several unidentified parties have conducted due-diligence inspections with the cooperation of Bowa employees.

CDIC took over five banks that were heavily in debt last year; the Enterprise Bank of Hualien (花蓮企銀), Taitung Business Bank (台東企銀), China United Trust and Investment Corp (中聯信託), The Chinese Bank (中華銀行) and Bowa Commercial Bank. Taitung Business Bank was sold to ABN-AMRO, while HSBC purchased the Chinese Bank. Cathay United Bank (國泰世華銀行) took the debt-ridden China United Trust and Investment Crop under its wing in October.
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