Waterland Financial Holdings Co (國票金控) yesterday confirmed its interest in acquiring shares in Taiwan Business Bank (台灣企銀) with a view to helping consolidate state-run financial institutes as urged by financial authorities.
The nation’s smallest financial conglomerate by assets made known its interest in a stock exchange filing after local media revealed its expansion plan.
“We will join the bidding for 636.48 million shares in Taiwan Business Bank, as the move will benefit both parties and advance the Financial Supervisory Commission’s [FSC] call for consolidation of state-run financial institutions,” Waterland Financial said.
The shares would translate into a 12 percent stake in Taiwan Business Bank, currently in the possession of state-run Mega Financial Holding Co (兆豐金控) that must sell the shares in the absence of acquisition or merger attempts.
Waterland Financial will notify the commission of its plan to buy the shares even though there is no guarantee it will win, the filing said.
With an emphasis on bills financing, Waterland Financial does not own a lender and is poised to gain customers and earnings after securing a considerable stake in Taiwan Business Bank, the filing said.
Waterland Financial will then propose to integrate the lender, which will have access to the conglomerate’s bills financing and securities businesses and clients, the filing said.
“Integration of the companies will be a win-win development for bilateral shareholders and employees given a lack of overlapping in existing operations,” the filing said.
Waterland Financial has long sought to buy a commercial lender and Taiwan Business Bank promises an ideal candidate with its focus on small and medium corporate customers, the filing said.
Consolidation of state-run financial institutions is the most effective way to help domestic financial companies to grow into regional champions, Waterland Financial said.
FSC Chairman William Tseng (曾銘宗) has reiterated plans to help one or two local financial conglomerates grow into regional champions, like DBS Bank, within three years.
DBS Bank is the largest in Southeast Asia, though it lagged behind all state-run Taiwanese lenders by assets a decade ago, Sophia Cheng (程淑芬), chief investment officer at Cathay Financial Holding Co (國泰金控) said earlier this week.
Cheng added that the key factor lies with mergers and acquisitions.
Waterland Financial has sought to increase its scale unsuccessfully in recent years.
Last year, the conglomerate lost a bid to CTBC Financial Holding Co (中信金控) to buy Taiwan Life Insurance Co (台灣人壽保險), though the deal fell through this year.
In 2010, the commission rejected Waterland Financial’s application to acquire MetLife Inc’s local insurance unit on concerns over a lack of funding and expertise in running an insurer.
Waterland Financial accumulated NT$1.38 billion (US$45.67 million) in net income as of last month, rising 80.8 percent from the same period last year, the company said, adding that the figures reflected substantial improvement in earnings ability.
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