CTBC Financial Holding Co (中信金控) yesterday said it had clinched a NT$6.1 billion (US$189 million) deal to fully acquire Royal Bank of Scotland Group PLC’s (RBS) Malaysian unit, accelerating its expansion into other Asian markets.
The deal came just two weeks after CTBC announced on March 29 it was buying a 35.6 percent stake in Thailand-based LH Financial Group PLC for NT$15.4 billion.
The government has been pushing local lenders to make overseas acquisitions amid fierce competition at home. Cathay Financial Holding Co (國泰金控) in January acquired a 20 percent stake in the Philippines’ Rizal Commercial Banking Corp and a 40 percent stake in Indonesia’s PT Bank Mayapada International through its life insurance unit, Cathay Life Insurance Co (國泰人壽), while Fubon Financial Holding Co (富邦金控) purchased a 48 percent stake in South Korea’s Hyundai Life Insurance Co in December last year.
The latest investment by CTBC makes the company the first local financial services provider to expand to Malaysia, the company said.
“This will be another breakthrough made by the company in expanding to Asia,” CTBC Financial senior vice president Rachael Kao (高麗雪) told a media briefing at the Taiwan Stock Exchange yesterday.
Upon the completion of the transaction, “CTBC will be the first local financial services provider to secure a license in Malaysia,” Kao said.
CTBC’s offer to purchase the British lender’s assets is to be conducted by its subsidiaries CTBC Bank (中信銀行) and Taiwan Life Insurance Co (台灣人壽保險), which will hold 51 percent and 49 percent stakes in Malaysia business respectively.
Acquiring the Malaysian unit allows “CTBC Bank to obtain a full banking license to provide extensive financial services for customers in Malaysia, where the government strictly controls foreign financial services providers,” Kao said.
In order to accelerate its expansion to other Asian markets to boost its business, the bank has been aggressively seeking to upgrade its representative office in Kuala Lumpur to a banking unit since its inception in November last year, Kao said.
In addition to the Malaysia unit, CTBC also owns two subsidiaries of RBS in Kuala Lumpur and Penang, where Taiwanese companies have built industry clusters, she said.
CTBC Bank’s board yesterday also agreed to invest NT$3.99 billion in an offshore banking unit operated by RBS’ Malaysia unit, representing a 93.5 percent discount based on its US$132.5 million of assets.
Commenting on speculation that CTBC intends to take over the controversial Taipei Dome build-operate-transfer project from Farglory Group (遠雄集團), Kao said the board did not discuss the matter during yesterday’s meeting.
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