CTBC Financial Holding Co (中信金控) has scuttled plans to fully acquire Royal Bank of Scotland Group PLC’s (RBS) Malaysian unit, but said this would not affect its plans to expand further into Asia.
CTBC Financial inked an agreement with RBS in April, which stated that the required regulatory applications for the sale of the Malaysian unit would be completed before Nov. 15.
However, progress on the NT$6.1 billion (US$195 million) acquisition had fallen behind expectations, dimming the likelihood that the process might be completed before the deadline, CTBC Financial senior vice president Rachael Kao (高麗雪) told an investors’ conference yesterday.
CTBC Bank (中信銀行), the company’s flagship unit, was to spend a further NT$3.98 billion to acquire RBS’ offshore banking unit in Labuan, Malaysia, but that purchase has also been called off, Kao said, adding that the setback would not affect the company.
“We are still on track to acquire a 35.6 percent stake in Thailand’s LH Financial Group PLC for NT$15.4 billion,” Kao said regarding the company’s expansion in Asia.
“Our agreement with the Thai company expires on Dec. 31, and both sides have entered the review process,” Kao said.
Malaysian regulators are stringent in assessing foreign entrants into its financial sector, CTBC Financial president Daniel Wu (吳一揆) said in April.
In June, investigators raided the offices of CTBC Financial and several other companies amid allegations that the conglomerate was involved in embezzlement, insider trading and irregular land transactions.
Market observers have said that these allegations did not help the company’s assessment by foreign regulators.
CTBC Financial reported that net income in the first half fell to NT$14.3 billion, 17 percent lower than a year ago. Earnings per share during the period were NT$0.79, compared with NT$1.04 last year.
It said that foreign currency loans represented 47 percent of its total loan book in the first half. Net interest margin was 1.44 percent at the end of the second quarter, compared with 1.39 percent a year ago.
The company said that its overall loan-to-deposit ratio improved from 78.73 percent a year ago to 81.1 percent at the end of June.
The company said it would continue to look overseas, amid successive interest rate cuts by the nation’s central bank.
It said that Tokyo Star Bank, its Japan-based subsidiary, contributed net income of NT$11.55 billion during the first half, while its newly acquired domestic life insurance subsidiary, Taiwan Life Insurance Co (台灣人壽保險), contributed net income of NT$2.37 billion.
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