Fubon Financial Holding Co (富邦金控), the nation's second-largest financial services group by market value, targets at least 20 percent profit growth this year and wants to make an acquisition "as soon as possible," chairman Daniel Tsai (蔡明忠) said.
"We are ready to do the next deal," Tsai, 48, said on Jan. 27.
The government aims to halve the number of financial holding companies to seven in two years to help them compete with foreign rivals such as Citigroup Inc and HSBC Holdings Plc.
PHOTO: WANG MIN-WEI, TAIPEI TIMES
Tsai said he is confident his group, which paid US$2.5 billion to acquire TaipeiBank (台北銀行) in August 2002, can be one of the remaining "national champions."
Fubon on Tuesday said its unaudited profit for last year rose 8 percent from a year ago to NT$15.1 billion (US$475 million).
"As Fubon has strong intention and good experience in mergers it has a good chance to be the first," said Andrew Chen, who oversees the equivalent of US$2.7 billion as president of HSBC Asset Management Taiwan.
The most likely target is First Financial Holding Co (第一金控), he said, "but Fubon should face strong competition" from Cathay Financial Holding Co (國泰金控) and Taishin Financial Holding Co (台新金控).
According to Forbes magazine, the Daniel Tsai family is the country's fifth richest with assets worth US$2.3 billion.
Cathay Financial, the nation's largest financial group owned by the nation's richest family with US$4.6 billion, is run by Daniel's cousin Tsai Hong-tu (蔡宏圖).
First Financial, the country's fifth-largest financial-services provider, is one possible acquisition target that would help Fubon achieve instant "national champion" status, Daniel Tsai said.
He said his bank wouldn't be the only bidder should the government decide to auction its 34 percent stake in First Financial.
"Our first choice is to just do one deal and be able to attain the status right away," he said. "I will hope to see our next acquisition happen as soon as possible."
Fubon's revenue and profit will surge this year as it integrates TaipeiBank's banking operation, he said.
Standard & Poor's on Jan. 3 affirmed its BBB+ long-term rating on the renamed Taipei Fubon Commercial Bank Co (台北富邦銀行) after the takeover of TaipeiBank took effect on Jan. 1.
"Our goal is to try to increase our profit this year by no less than 20 percent [for] both bank and financial company as a whole," Tsai said. "Next year, I would say that we cannot expect the same kind of 20 percent increase. Lesser expectations like 15 percent would be reasonable."
Fubon is also interested in acquiring smaller regional banks in areas outside Taipei where its presence is not strong, he said.
His eventual aim is to merge with any of the other top five private-sector financial institutions, Cathay Financial, Taishin Financial, Chinatrust Financial Holding Co (中信金控) and China Development Financial Holding Co (中華開發金控).
"Any combination of the top five will produce unbeatable national champions," Tsai said, noting that this won't be easy to achieve.
"The issue of family face and who's going to be in control are the issues that I don't believe can be easily resolved. Such combinations might happen at a much later date," he said.
Fubon is also seeking to expand business in China, which currently only allows Taiwanese banks to open representative offices.
International Bank of Asia (港基銀行), a Hong Kong-based lender 75 percent owned by Fubon, may be its springboard into China. Fubon bought the stake for HK$3.24 billion (US$416 million) in March last year, becoming the first Taiwanese lender to operate a branch network in Hong Kong.
"This year is very important to us as we try to build International Bank into an offshore platform to offer comprehensive financial services to Taiwanese businessmen operating in greater China," Tsai said.
Hong Kong-registered lenders are allowed to open a branch in China with minimum assets of US$6 billion, compared with a US$20 billion requirement for foreign banks. A branch may be opened only after a representative office has been set up for two years.
International Bank will apply to set up a representative office in Dongguan Province, Tsai said.
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