Fubon Group (富邦集團) aims to strengthen its banking and securities arms through mergers and acquisitions, founder and chairman Tsai Wan-tsai (蔡萬才) said yesterday.
The group, whose members include Fubon Financial Holding Co (富邦金控), Fubon Land Development Co (富邦建設), Taiwan Mobile Co (台灣大哥大) and Fubon Multimedia Technology Co (富邦媒體科技), aspires to evolve into a regional financial conglomerate in the next half-century after Fubon Financial outperformed its peers in terms of earnings performance for two consecutive years.
NOT BIG ENOUGH
“The group should strengthen its banking and securities arms because neither is big enough,” Tsai told a media briefing after a celebration banquet marking the group’s 50th anniversary.
To that end, the group will seek to acquire peers at home while pursuing organic growth for overseas units, especially in China and Vietnam, Tsai said.
The group was founded on April 19, 1961, when Cathay Insurance Co (國泰產險) — which has since been renamed Fubon Insurance Co (富邦產險) — started operations with only 10 employees. Today, the group has more than 30,000 workers, company data show.
Tsai, whose family ranked as the nation’s second richest on Forbes magazine’s billionaire list this year, said consolidation of the banking sector was an uphill struggle in Taiwan because of political reasons and resistance by union workers.
“For the past 50 years, I’ve seen the sector turn from a virtual monopoly by state-run lenders into a fragmented and overcrowded field characterized by cutthroat competition,” Tsai said. “This phenomenon is not healthy for the industry.”
The government can take steps to help break the status quo, the 82-year-old said.
He declined to say if the group is in any acquisitions talks, saying premature revelations would ruin prospective deals.
As for overseas expansion, the group will continue to focus on China, with its vast market and geographical proximity, and Vietnam, given its growth potential and low personnel costs, Tsai said.
OPPORTUNITIES
“The group won’t have to worry about a lack of business opportunities for a long time, if the China expansion plan bears fruit,” he told reporters.
Fubon Financial owns a 20 percent stake in China’s Xiamen City Commercial Bank (廈門商銀) through its Hong Kong subsidiary and plans to open branches in Chongqing, Tianjin, Zhangzhou and Nanchang later this year and next year, after setting up branches in Fuzhou and Quanzhou.
Fubon Financial president Victor Kung (龔天行) said that the company preferred acquisition opportunities at home because overseas ventures involve high risks.
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