King’s Town Bank (京城銀行), the medium-sized, Tainan-based lender yesterday said it has secured NT$1.5 billion (US$47 million) in funding via a planned selling of convertible bonds.
The lender’s chairman Dai Cheng-zhi (戴誠志) will purchase NT$1 billion of the bonds, while Sung Hsueh-jen (宋學仁), a banker previously with Goldman Sachs Asia, will buy the rest.
The bonds could be converted into shares at the price of NT$10 per share after a three-year period, the lender said.
The move is set to dilute the Tsai family’s holdings in the lender, the bank said.
The family and its investment associates are the lender’s largest shareholders, accounting for roughly 30 percent.
The family also owns the publicly-listed King’s Town Construction Co (京城建設). In 2006, King’s Town Construction chairman Tsai Tien-tsan (蔡天贊) acquired, renamed and recapitalized King’s Town Bank, which was formerly known as Tainan Business Bank (台南企銀).
The lender has positioned itself as a boutique regional financial services provider, aiming to establish a solid market foothold in southern Taiwan.
Of the lender’s 63 branches, 56 are in central or southern Taiwan and target small and medium-sized enterprises.
King’s Town Bank yesterday posted profits for the first six months of NT$805.3 million, a reverse of losses of NT$60.6 million in the same period last year. Revenues grew 43 percent year-on-year to NT$1.8 billion.
The lender attributed the rise in profits to its control of non-performing debt and operating expenses, adding that the non-performing loan ratio is expected to drop to 0.6 percent in the second half of the year, from 0.73 percent in the first half.
Coverage ratio is likely to remain above the 200 percent level in the second half, compared with a ratio of 213.47 percent in the first six months, it said.
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