Cathay United Bank (國泰世華銀行), a subsidiary of Cathay Financial Holding Co (國泰金控), has inked an agreement to acquire a 70 percent stake in Cambodia-based Singapore Banking Corp Ltd, in a bid to tap into the emerging market in Southeast Asia, Cathay Financial spokesman Alan Lee (李偉正) said yesterday.
Lee declined to comment on the amount of money involved or how the deal would be carried out, saying the company would supply more details after the board gives its go-ahead today.
The acquisition, which also needs regulatory approval on both sides, would give Cathay Bank a foothold to expand in Cambodia after plans to set up a branch there failed to gain headway, Lee said, adding that the lender filed applications earlier this year.
EYEING SOUTHEAST ASIA
An increasing number of Taiwanese firms are moving to Southeast Asia after labor costs rose sharply in China in recent years.
Singapore Banking Corp, which was set up in 1993, currently operates 16 offices in Cambodia, including in the capital Phnom Penh, according to Cathay Financial.
Lee said after the acquisition, Cathay United Bank would have the largest service network in Cambodia among all Taiwanese banks.
In addition, Singapore Banking Corp would be Cathay United Bank’s second subsidiary in Southeast Asia, after the Taiwanese lender established its first subsidiary in Vietnam, he said.
OVERSEAS PRESENCE
Currently, United Cathay Bank has an overseas presence in Los Angeles, Hong Kong, Singapore, Shanghai, Malaysia, Philippines, Thailand and Vietnam.
In related news, the Financial Supervisory Commission has approved plans by E. Sun Commercial Bank (玉山銀行) to buy Chiayi Fourth Credit Cooperative Association (嘉義第四信用合作社) to expand its service network, customer base and earnings potential.
The deal will take place on Nov. 3, the regulator said.
NEW BRANCHES
E. Sun Bank, the banking arm of E. Sun Financial Holding Co (玉山金控), announced in March that it would acquire the grassroots lender for NT$110 million (US$3.72 million).
The deal gives E. Sun Bank four new branches as the lender aims to strengthen its retail banking operations in central and southern Taiwan.
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