China Development Financial Holding Corp (中華開發金控) aims to acquire a commercial bank to boost its financial proficiency and increase stable income as the conglomerate shifts its business strategy, top executives said yesterday.
“We are actively reviewing every acquisition opportunity presented to us” as current banking rules limit the development of the group’s main subsidiary, China Development Industrial Bank (中華開發工銀), China Development Financial president Paul Yang (楊文鈞) told an investors’ conference.
The lender, which accounts for 62 percent of the group’s assets, can only make loans to institutional customers and it reported no non-performing loans last year due to cautious screening of its customers, Yang said.
As of December last year, the bank had NT$110 billion (US$ 3.68 billion) in deposits and it had lent NT$89 billion to about 820 customers, mainly medium and large corporations, Yang said.
Being an industrial bank, the lender cannot issue credit cards, sell wealth management products or conduct other retail banking operations that generate higher yields, Yang said.
“The bank must evolve into a commercial bank to stay competitive,” Yang said, adding that the group is interested in buying a lender that specializes in consumer banking and the wealth management business.
With a mild global economic recovery underway, the investment banking business should fare better this year compared with last year given the rebound in share prices, Yang said.
Meanwhile, the group plans to increase its investments in overseas bonds to pursue higher yields, he said.
The group also intends to complete the integration of KGI Securities Co (凱基證券) and Grand Cathay Securities Corp (大華證券) by June 22, Yang said.
The securities arm should emerge from the integration stronger, with a market share second only to Yuanta Securities (元大寶來證券), and the local market’s realignment should lend a helping hand, Yang said, as small brokerages may pull out amid sluggish trading.
China Development Financial is also interested in entering into partnerships with Chinese firms to tap the Chinese securities market, favoring joint ventures in Shenzhen or Shanghai, Yang said.
However, the firm does not plan to take any action until Taiwan and China work out the details of such ventures, after bilateral securities regulators pledged in January to ease the related rules, Yang said.
China Development Financial shares closed up 1.4 percent at NT$7.99 in Taipei yesterday, outpacing the TAIEX’s 0.48 percent rise, Taiwan Stock Exchange data showed.