E. Sun Commercial Bank (玉山銀行), the banking arm of E. Sun Financial Holding Co (玉山金控), yesterday announced plans to buy a 70 percent stake in Phnom Penh, Cambodia-based Union Commercial Bank PLC (UCB) for US$69.33 million to facilitate its expansion into Southeast Asia.
“We decided to buy a stake in UCB, rather than set up a branch in Cambodia after discovering that USB shares similar ideas about business development with E. Sun Bank,” E. Sun Financial president Joseph Huang (黃男州) told reporters at the Taiwan Stock Exchange.
Created in 1994 in the Cambodian capital, UCB has five branches focused on savings, lending and credit card businesses, Huang said.
UCB had US$330 million in assets as of December last year, the eighth-largest bank in Cambodia with a market share of 3.2 percent, Huang said.
“E. Sun Bank intends to copy its business model in Taiwan at the Cambodian lender to help boost its financial proficiency and scale of economies,” he said.
The investment came as bank-oriented E. Sun Financial seeks to expand its service network in Asia, after establishing branches in Singapore and Dongguan, China, last year.
The conglomerate also plans forays into Vietnam, Myanmar and Australia to take advantage of the region’s rapid economic growth.
The deal still needs to be approved by the regulators in Taiwan and Cambodia, Huang said.
Earlier this month, E. Sun Financial said it is looking to increase its loan book and fee income by a double-digit percentage this year, driven mainly by a thriving credit card business and better ties with small and medium-sized enterprises.
The company posted NT$7.06 billion in net profits last year, more than double the level in 2011, as its focus on the mass market paid off, a company report said.