Union Bank of Taiwan (聯邦銀行) shareholders yesterday approved a board proposal to reduce the bank’s capital by NT$5.65 billion (US$180 million), or 24 percent, a company executive said.
After the reduction, the bank will have a capital of NT$17.54 billion, Herman Tu (涂洪茂), an executive vice president at the bank, said by telephone yesterday.
The bank expects to carry out the capital reduction within a month, he added.
BILLS FINANCE
Shareholders at the annual general meeting also approved another proposal for the bank to acquire its bills finance subsidiary — Union Bills Finance Co (聯邦票券) — by June 30, according to its stock exchange filing.
The lender announced in December that it planned to take full ownership of the bills finance company by swapping 1.13 Union Bank shares for each Union Bills share.
Union Bank already owns a 42.76 percent share in Union Bills. After the merger, Tu said the bank would issue new shares to raise NT$1.9 billion in fund to boost its capital.
Tu was upbeat about the bank’s earnings outlook after posting a net income of more than NT$300 billion in the first quarter of this year, given robust foreign exchange, wealth management and credit card businesses.
He said the bank first swung into the black in the fourth quarter of last year, when it posted a net profit of NT$255.9 million after two consecutive years of losses.
The bank incurred losses of NT$1.2 billion in 2008 and NT$4.9 billion in 2007.
GROWTH DRIVERS
The bank expects to see 22 percent growth in its deposit balance to NT$350 billion by the end of this year and 20 percent growth in its loan book balance to NT$201.2 billion, it said in a press statement.
It also expects its foreign exchange business to reach US$5.95 billion this year, the statement said.
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