Cathay Financial Holding Co (國泰金控), the nation's biggest financial services provider, denied it planned to acquire the debt-ridden Chinfon Commercial Bank (慶豐銀行), a company filing to the Taiwan Stock Exchange said yesterday.
Lee Chang-ken (
The Chinese-language Econo-mic Daily News said in a front-page story yesterday that Cathay's board would meet on Dec. 31 to approve the purchase of Chinfon's assets and liabilities at NT$1.8 per share.
The report said the acquisition would add 36 branches to Cathay Financial's existing local network of 161.
In October, Cathay Financial said it wanted to increase its network to more than 200 branches nationwide after it won a government auction to take control of China United Trust and Investment (中聯信託), which has 15 branches and a license to open five more.
Commenting on the news, SinoPac Securities Corp (永豐金證券) considered the reported acquisition price "reasonable," the Taipei-based brokerage said in a note to its clients yesterday.
But "we are neutral on the news and will closely monitor the following progress," SinoPac said.
Shares of Cathay Financial rose 0.15 percent to close at NT$66.2 yesterday, underperforming a 0.39-percent rise in the benchmark TAIEX index. Chinfon is not a listed company.
Chinfon has seen its capital base decline significantly in the first three quarters of the year, making it increasingly difficult to meet the regulatory adequate capital requirement should no new capital injection materialize in the next few months.
The Taipei-based lender's capital adequacy ratio -- which measures a bank's financial strength by dividing its assets by its capital -- has dropped below the mandatory 8 percent since the fourth quarter of last year. The ratio declined to 1.25 percent at the end of September from 9.21 percent a year earlier, according to Financial Supervisory Commission's (FSC) statistics released yesterday.
At the end of October, the bank reported NT$91.48 billion (US$2.18 billion) in total deposits and NT$64 billion in outstanding loans, falling from NT$93.33 billion and NT$66.28 billion respectively in the previous month, the commission's figures showed.
The bank's bad loans increased to NT$14.4 billion in October or a non-performing loan (NPL) ratio of 22.5 percent, from NT$14 billion or a NPL ratio of 21.19 in September, the same data showed.
Chinfon's net value declined to NT$866 million at the end of October from NT$1.44 billion in September, while its losses expanded to NT$4.96 billion from NT$4.4 billion during the same period, according to the government data.
The FSC has set a month-end deadline for Chinfon to raise fresh capital to improve its financial condition.
FSC's chairwoman Susan Chang (張秀蓮) said last night a local financial holding company, not Cathay Financial, was interested in the bank, although the details remained unclear.
Chinfon could be under government supervision and taken over by the state-run Central Deposit Insurance Corp (中央存保) if the lender fails to meet the regulator's recapitalization deadline.
ADVANCED: Previously, Taiwanese chip companies were restricted from building overseas fabs with technology less than two generations behind domestic factories Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), a major chip supplier to Nvidia Corp, would no longer be restricted from investing in next-generation 2-nanometer chip production in the US, the Ministry of Economic Affairs said yesterday. However, the ministry added that the world’s biggest contract chipmaker would not be making any reckless decisions, given the weight of its up to US$30 billion investment. To safeguard Taiwan’s chip technology advantages, the government has barred local chipmakers from making chips using more advanced technologies at their overseas factories, in China particularly. Chipmakers were previously only allowed to produce chips using less advanced technologies, specifically
The New Taiwan dollar is on the verge of overtaking the yuan as Asia’s best carry-trade target given its lower risk of interest-rate and currency volatility. A strategy of borrowing the New Taiwan dollar to invest in higher-yielding alternatives has generated the second-highest return over the past month among Asian currencies behind the yuan, based on the Sharpe ratio that measures risk-adjusted relative returns. The New Taiwan dollar may soon replace its Chinese peer as the region’s favored carry trade tool, analysts say, citing Beijing’s efforts to support the yuan that can create wild swings in borrowing costs. In contrast,
TARIFF SURGE: The strong performance could be attributed to the growing artificial intelligence device market and mass orders ahead of potential US tariffs, analysts said The combined revenue of companies listed on the Taiwan Stock Exchange and the Taipei Exchange for the whole of last year totaled NT$44.66 trillion (US$1.35 trillion), up 12.8 percent year-on-year and hit a record high, data compiled by investment consulting firm CMoney showed on Saturday. The result came after listed firms reported a 23.92 percent annual increase in combined revenue for last month at NT$4.1 trillion, the second-highest for the month of December on record, and posted a 15.63 percent rise in combined revenue for the December quarter at NT$12.25 billion, the highest quarterly figure ever, the data showed. Analysts attributed the
Taiwan Semiconductor Manufacturing Co’s (TSMC, 台積電) quarterly sales topped estimates, reinforcing investor hopes that the torrid pace of artificial intelligence (AI) hardware spending would extend into this year. The go-to chipmaker for Nvidia Corp and Apple Inc reported a 39 percent rise in December-quarter revenue to NT$868.5 billion (US$26.35 billion), based on calculations from monthly disclosures. That compared with an average estimate of NT$854.7 billion. The strong showing from Taiwan’s largest company bolsters expectations that big tech companies from Alphabet Inc to Microsoft Corp would continue to build and upgrade datacenters at a rapid clip to propel AI development. Growth accelerated for
RSS