Thu, May 12, 2011 - Page 12 News List

Chinatrust still eyeing acquisitions

REGIONAL POWER:The nation’s third-largest financial holding company is interested in setting up a subsidiary in China and purchasing banks around the Asian region

By Crystal Hsu  /  Staff Reporter

Chinatrust Financial Holding Co (中信金控), the nation’s third-largest financial holding company by assets, is still interested in acquiring lenders and securities houses at home and abroad while awaiting regulatory approval for its attempted acquisition of MetLife Inc’s local unit, company executives said yesterday.

“We’re looking for opportunities to expand the group further by acquiring banks in the region and securities houses across the Taiwan Strait,” Chinatrust Financial president Daniel Wu (吳一揆) told reporters on the sidelines of an investors’ conference.

While the conglomerate owns the nation’s largest credit card issuer, Chinatrust Commercial Bank (中國信託商銀), its brokerage arm, Chinatrust Securities Co (中信證券), remains small in operation and market share, Wu said.

The cross-strait Economic Cooperation Framework Agreement (ECFA) warrants greater investment in securities brokerage services, which could be allowed to expand in China later on, Wu said.

He declined to reveal whether the conglomerate was in talks over potential mergers and acquisitions, saying only that the brokerages were limited to Taiwan and China.

Meanwhile, the group is looking for opportunities to acquire banks around Asia in a bid to strengthen its regional presence, Wu said. The banking arm is the group’s flagship unit and main source of income.

To that end, the holding company prefers to set up a subsidiary, instead of a branch, in China if authorities on both sides of the Strait give the go-ahead, Wu said.

“We’re giving serious thought to creating a subsidiary, which would make promoting consumer banking easier than a branch,” Wu said. “Consumer banking has been the signature business of Chinatrust Bank.”

Domestic financial institutions could expand in China in two of three ways — setting up a branch, establishing a subsidiary or acquiring shares in Chinese peers. The Financial Supervisory Commission is considering easing restrictions to help Taiwanese banks better compete with foreign rivals in China.

Chinatrust Financial expects to gain regulatory approval in July for its purchase of MetLife Taiwan Insurance Co (大都會人壽) from its US parent for US$180 million, Wu said. Chinatrust Bank will keep its sales channels open after integration, he said.

Wu Chung-shu (吳中書), a former economics researcher at Academia Sinica who in March joined Chinatrust Bank as chief economist, said the New Taiwan dollar was about to peak in value after appreciating to about NT$28.50 against its US counterpart.

The economist said the gain in the NT dollar has failed to mitigate imported inflationary pressures because the yen rose higher, whereas Japan is Taiwan’s biggest source of imported goods.

“It is unfavorable for the NT dollar to keep appreciating, while the South Korean won is weakening,” Wu Chung-shu said.

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