The Central Deposit Insurance Corp (CDIC) yesterday emptied its pockets to dispose of The Chinese Bank (
"In negotiations, the HSBC agreed to take over The Chinese Bank's assets, liabilities and operations [in return for a] payment of NT$47.488 billion [from the government's financial restructuring fund]," a CDIC press release said.
The parties are expected to sign a contract on Wednesday, the release said.
HSBC's asking price was within 10 percent of the amount offered by the CDIC, president Johnson Chen (
After the acquisition, HSBC's network of branches will increase from eight to 47.
"The Chinese Bank will provide HSBC in Taiwan with significant opportunities in retail, commercial and corporate banking, while we believe HSBC's international network, global expertise and financial strength will benefit our new customers and employees," HSBC Taiwan CEO Alistaire Currie said.
The acquisition also signifies HSBC's commitment to the nation, as "Taiwan is a key component of HSBC's Greater China positioning," HSBC chairman Vincent Cheng (鄭海泉) said in the same statement.
More than 750,000 Taiwanese companies operate in China, with Taiwanese direct investment in China totaling US$7.6 billion last year -- an increase of 180 percent from a year earlier -- Cheng said.
He said HSBC, a leader in Hong Kong and the largest foreign bank in China, was strongly positioned to benefit from the region's growing trade and investment.
To complete the deal, HSBC is required to establish a local subsidiary with a minimum capitalization of NT$10 billion in three years, or within one year of HSBC's total assets in Taiwan exceeding NT$450 billion, whichever comes first, the HSBC statement said.
As of late October, The Chinese Bank had a net worth of negative NT$29 billion. However, Chen said yesterday that the troubled lender's losses had worsened.
The bank now had debts of NT$130 billion, compared with only NT$90 billion in assets, he said.
The government's financial restructuring fund will have only NT$30 billion left in the coffers after another NT$12.9 billion is paid to Cathay United Bank (國泰世華銀行), which agreed to purchase debt-ridden China United Trust and Investment Crop (CUTIC, 中聯信託) in October.
Under such circumstances, the CDIC may have to borrow as much as NT$18 billion from the central bank and domestic banks to pay for the HSBC deal, Chen said. He said interest rates for any loans had not been decided.
However, Chen said the CDIC expected to recoup some cash by liquidating The Chinese Bank's NT$20 billion holdings in consumer banking and NT$10 billion corporate banking businesses.
Chen said the agency would reserve enough capital to dispose of debt-ridden Bowa Bank (寶華銀行) in an auction set for Jan. 31.
IN THE AIR: While most companies said they were committed to North American operations, some added that production and costs would depend on the outcome of a US trade probe Leading local contract electronics makers Wistron Corp (緯創), Quanta Computer Inc (廣達), Inventec Corp (英業達) and Compal Electronics Inc (仁寶) are to maintain their North American expansion plans, despite Washington’s 20 percent tariff on Taiwanese goods. Wistron said it has long maintained a presence in the US, while distributing production across Taiwan, North America, Southeast Asia and Europe. The company is in talks with customers to align capacity with their site preferences, a company official told the Taipei Times by telephone on Friday. The company is still in talks with clients over who would bear the tariff costs, with the outcome pending further
WEAKER ACTIVITY: The sharpest deterioration was seen in the electronics and optical components sector, with the production index falling 13.2 points to 44.5 Taiwan’s manufacturing sector last month contracted for a second consecutive month, with the purchasing managers’ index (PMI) slipping to 48, reflecting ongoing caution over trade uncertainties, the Chung-Hua Institution for Economic Research (CIER, 中華經濟研究院) said yesterday. The decline reflects growing caution among companies amid uncertainty surrounding US tariffs, semiconductor duties and automotive import levies, and it is also likely linked to fading front-loading activity, CIER president Lien Hsien-ming (連賢明) said. “Some clients have started shifting orders to Southeast Asian countries where tariff regimes are already clear,” Lien told a news conference. Firms across the supply chain are also lowering stock levels to mitigate
NEGOTIATIONS: Semiconductors play an outsized role in Taiwan’s industrial and economic development and are a major driver of the Taiwan-US trade imbalance With US President Donald Trump threatening to impose tariffs on semiconductors, Taiwan is expected to face a significant challenge, as information and communications technology (ICT) products account for more than 70 percent of its exports to the US, Chung-Hua Institution for Economic Research (CIER, 中華經濟研究院) president Lien Hsien-ming (連賢明) said on Friday. Compared with other countries, semiconductors play a disproportionately large role in Taiwan’s industrial and economic development, Lien said. As the sixth-largest contributor to the US trade deficit, Taiwan recorded a US$73.9 billion trade surplus with the US last year — up from US$47.8 billion in 2023 — driven by strong
RESHAPING COMMERCE: Major industrialized economies accepted 15 percent duties on their products, while charges on items from Mexico, Canada and China are even bigger US President Donald Trump has unveiled a slew of new tariffs that boosted the average US rate on goods from across the world, forging ahead with his turbulent effort to reshape international commerce. The baseline rates for many trading partners remain unchanged at 10 percent from the duties Trump imposed in April, easing the worst fears of investors after the president had previously said they could double. Yet his move to raise tariffs on some Canadian goods to 35 percent threatens to inject fresh tensions into an already strained relationship, while nations such as Switzerland and New Zealand also saw increased
RSS