Chinatrust to fortify overseas operations

INTENTIONS::Chinatrust Bank has told Tokyo Star’s major shareholders it plans to buy a nearly 100 percent stake of the company, a Japanese business newspaper said

By Crystal Hsu  /  Staff reporter

Mon, Dec 31, 2012 - Page 13

Chinatrust Commercial Bank (中信銀行), Taiwan’s largest credit card issuer, is in talks to buy out Tokyo Star Bank to boost its retail banking in Japan, which is part of a sustained bid to strengthen its international operations, the Japanese-language Nikkei business daily said yesterday.

Chinatrust Bank senior vice president Rachael Kao (高麗雪) declined to comment on the deal, but said the bank would seize both organic and inorganic opportunities to grow its economies of scale at home and abroad.

TIMING

“The company cannot comment on any merger and acquisition deals until the time is ripe,” Kao said by telephone.

However, the bank, the main subsidiary of Chinatrust Financial Holding Co (中信金控), has been looking for opportunities to expand operations across different sectors in the region, Kao said.

The Nikkei ran a headline story on its front page saying Chinatrust Bank has told Tokyo Star’s major shareholders of its plans to buy a nearly 100 percent stake in the regional lender for about ¥50 billion (US$580.8 million).

TERMS

The Tokyo-based lender’s shareholders — including US investment fund Lone Star Funds, Japan’s Shinsei Bank and France’s Credit Agricole — are likely to examine the terms of the proposed takeover early next year, the Nikkei said.

The Japanese bank, which mainly focuses on consumer banking through housing loans, has been troubled by a slump in earnings since the global financial crisis in 2008 and its shareholders have been looking for a buyer, the paper said.

BALANCE

It had a deposit balance of ¥2.06 trillion and an outstanding loan balance of ¥1.52 trillion as of the end of September, the Nikkei said.

The planned acquisition would be unprecedented, although foreign funds have taken over Japanese banks before, it said, adding that Chinatrust Bank would make a final decision on the price after reviewing Tokyo Star’s assets.

The Taiwanese lender owns 147 branches in Taiwan and another 67 outlets in the US, Canada, Japan, India, Indonesia, the Philippines, Thailand, Vietnam, Hong Kong, Singapore and China, making it the nation’s most international banking institution, the company said on its Web site.

STRATEGY

In line with an aggressive expansion strategy, the parent company integrated the local fund house Truswell Securities Investment Trust Co (富鼎投信) last month and the local unit of New York-based MetLife Inc last year.

Chinatrust Financial, the nation’s third-largest by assets, reportedly lost the bid for Kuo Hua Life Insurance Co (國華人壽) to Transglobe Life Insurance Co (全球人壽) last month and China’s First Sino Bank (華一銀行) to Fubon Financial Holding Co (富邦金) earlier this month.

Shares in Chinatrust Financial shed 1.15 percent on Friday to NT$17.15, weaker than the TAIEX’s 0.67 percent rise, after the company indicated plans to raise NT$20 billion in new capital next year at NT$15 per share.