Ta Chong Bank open to selling to foreign investors

By Amber Chung  /  STAFF REPORTER

Wed, Dec 20, 2006 - Page 11

Ta Chong Bank (大眾銀行), the nation's fourth-largest cash card issuer, may sell as much as a quarter of the bank to foreign investors to sharpen its competitive edge, the lender said yesterday.

"We are open to selling 20 percent to 25 percent to foreign rivals for a strategic partnership," Ta Chong spokesman James Chiou (邱正光) said yesterday. "We do not welcome private equity fund players for any buyout deals."

The bank said it prefers foreign insurance firms and banks to obtain know-how and introduce new financial products and services to improve its wealth management and treasury business.

Several European and US banks have approached Ta Chong to express their interest.

Chiou said the bank had not started talks, but would complete discussions as soon as possible.

"We haven't set a timeframe ... although it generally takes at least six months of talks to complete a deal like this," he said.

The Ta Chong board agreed that chairman Chen Tien-mao (陳田錨) would talk with local and foreign financial institutions for strategic tie-ups, the bank said in a filing to the Taiwan Stock Exchange (TSE) yesterday.

International investors have acquired a 27 percent stake of Ta Chong in the market, Chiou said.

Ta Chong is considered a potential foreign takeover target after Standard Chartered Bank's acquisition of Hsinchu International Bank (新竹國際商銀), a move expected to speed consolidation in the small, standalone bank segment.

To strengthen its financial structure, Ta Chong plans to reissue subordinate debt this month to boost its capital adequacy ratio to nearly 10 percent from the current 8.2 percent.