Mon, Dec 22, 2008 - Page 12 News List

Fubon buys 19.99 percent in Xiamen bank

FIRST TIME Fubon Financial chairman Daniel Tsai said that his bank’s China-bound investment marks an important historical breakthrough in cross-strait financial ties

STAFF WRITER

Fubon Financial Holding Co (富邦金控), the nation’s second-largest financial service provider by market value, completed its acquisition of a 19.99 percent stake in Xiamen City Commericial Bank (廈門商銀) on Saturday, snapping up three board seats and top-ranking managerial posts at the Chinese bank, its press statement said late on Saturday night.

Fubon Financial has named three seats on the Chinese bank’s 11-member board, including Charles Kao (高朝陽), former head of its banking unit, who was elected the first Taiwanese president of Xiamen City Commerical Bank, the statement said.

Kao, on assuming his new post, said that the Chinese bank may evaluate this year new banking opportunities in neighboring cities such as Quanzhou, Fuzhou and Zhangzhou in Fujian Province, Chinese media reports said.

The bank would be interested in going public and upgrading to a provincial bank if business is good in the next year, Kao was quoted as saying.

Kao said the Chinese bank currently has 656 employees in 32 branches, and has absorbed 14.6 billion yuan (US$2.1 billion) in deposits, or a 6.5 percent market share in Xiaman.

During its shareholder meeting on Saturday, Xiamen City Commercial Bank approved a fund-raising proposal by issuing 242 million new shares, priced at 2.3025 yuan per share, to raise 557 million yuan, or a 48 percent stake of the bank.

Fubon Financial will spend 230 million yuan to take up the bank’s 99.95 million new shares, or a 19.99 percent stake, and the Chinese municipal city government’s bureau of finance will acquire another 2.1216 million shares to make it the bank’s biggest shareholder with a 26.7 percent stake while several other Chinese investors will take up a total of 28.01 percent, the statement said.

After the new capital injection, Xiamen City Commercial Bank’s net worth will exceed 1 billion yuan, boosting the capital adequacy ratio to over 10 percent with a 100 percent coverage ratio.

Fubon Financial chairman Daniel Tsai (蔡明忠) said that his bank’s China-bound investment marks an important historical breakthrough in cross-strait financial exchange.

Fubon Financial vowed to extend its complete financial services to 2,500 Taiwanese businesses in China.

As of the end of last year, Xiamen City Commercial Bank had 17.744 billion yuan in total assets and posted 595 million yuan in earnings and 10 million yuan in after-tax net profits.

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