By early next year, the government plans to sell its 23 percent stake in First Commercial Bank (第一銀行) -- the nation's largest publicly traded lender by assets -- and Citibank NA may be a potential suitor, Vice Minister of Finance Susan Chang (張秀蓮) said yesterday.
"The bank is working on locating a strategic partner, but no final decision has been made yet," Chang told reporters after yesterday's finance committee meeting at the legislature.
Chang made the comments in response to a local media report, which said that the ministry is eyeing Citibank to buy up government-owned shares in the state-run bank.
A Chinese-language newspaper reported yesterday that the management committee of Cabinet's Development Fund (
The paper quoted Hsu Chin-chou (許欽洲), deputy executive secretary of the committee, as saying that "Citibank may be a desirable choice."
But Hsu yesterday denied making the comment.
"What I meant was that Citibank should work as a matchmaker, helping the First Commercial to locate possible buyers," Hsu told the Taipei Times yesterday.
First Commercial executive vice president Chang Yi-hsiung (張義雄) yesterday also rejected the media speculation, saying that the bank has not approached any specific investors so far.
"The bank has only consulted with some investment bankers about management of its share sale," Chang said.
Currently, First Commercial is still waiting for the ministry's instructions to sell government-owned shares in the form of American Depository Receipts (ADRs) overseas, Chang added.
The bank's shares sale overseas was previously endorsed by Premier Yu Shyi-kun. In mid September, Yu instructed the finance ministry to sell its First Commercial shares to a foreign financial institution, hoping the move would bring more foreign banking management expertise into the local system.
First Commercial shares rose NT$1.4, or 6.7 percent on the news yesterday to close at NT$22.2 per share on the TAIEX.
Despite the media speculation, both Citibank and Salomon Smith Barney -- both members of Citigroup -- yesterday claimed that they're not cooking up any deals with the government.
"We have no knowledge of any such deal between the bank and the government," a public relations manager quoted Eric Chen (陳聖德), country manager for Citibank, and Du Ying-tzyong (杜英宗), chairman of Salomon Smith Barney in Taiwan, as saying yesterday.
Chen had advised the government to seek potential buyers overseas. As First Commercial has successfully reduced its non-performing loan ratio to 2.5 percent, the bank should be able to attract many multinational buyers at a reasonable share price, Chen said.
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