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Sunny Bank eyes foreign buyers

Privately owned Sunny Bank (陽信商銀) may release a controlling stake to a foreign private equity buyer by the end of this month at the earliest, a company executive said yesterday.

“With an aim of beefing up [business] know-how, we haven’t ruled out the possibility of selling more than 51 percent of shares to a foreign investor,” assistant vice president Kenny Lu (呂沛霖) said in a telephone interview.

Lu said four foreign private equity funds, including the Carlyle Group of the US and MBK Partners from South Korea, have expressed interest in pumping fresh capital into the company.

Carlyle and MBK have both completed the due diligence check on the bank while the other two funds are still in the process of evaluation, he said.

As of the end of last month, the bank reported NT$6 million (US$198,314) in losses, part of which were incurred from recent exchange losses out of its US$25 million holdings, with the net worth totaling NT$12.6 billion, or NT$10.2 per share, Lu said.

Once foreign buyers deliver their offers, the bank’s 15-member board will review the proposals and make a decision.

The board’s decision would then be put on the agenda for final approval at the company’s next shareholders’ meeting, which is scheduled for June 23, Lu said.

Although the bank suffered a short-term liquidity problem, its branch licenses will still be a great attraction to foreign buyers, Wang Chien-ming (王建民), an analyst with Capital Securities Corp (群益證券) said yesterday.

Sunny Bank has several offices and a total of 96 branches nationwide, 41 of which are located in the greater Taipei area.

Wang was upbeat about the bank’s capital injection plan.

Once the bank closes a deal with a foreign buyer with “deep pockets,” its performance in the wealth management businesses as well as internal risk control would greatly improve, he said.

If upper-level foreign expertise was also brought in, the bank might see solid growth in its syndicated loans and corporate loans businesses, the analyst said.

Local media have speculated that the bank will be too expensive if the foreign buyer has to pay more than NT$15 per share.

But Wang said a premium of 50 percent to 80 percent would be reasonable — which suggests a closing price of between NT$15.3 and NT$18.36 per share, based on the lender’s net worth of NT$10.2 per share.

To pay a 100 percent premium, or NT$20.4 per share, Sunny Bank would put a lot of liquidity pressure on the future buyer, the analyst said.
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