The Financial Supervisory Commission (FSC) has approved an application filed by SinoPac Financial Holdings Co (永豐金控) to acquire King’s Town Bank (京城銀行), the financial regulator said on Thursday.
The FSC said the acquisition is expected to provide Bank SinoPac (永豐銀行), the banking arm of the financial holding firm, with the second-highest number of branches in the nation, behind only Taiwan Cooperative Bank (合作金庫銀行).
Following a two-and-a-half-month review after the application was submitted in early April following approval by shareholders of the two financial institutions in March, Banking Bureau Deputy Director Wang Yun-chung (王允中) said the FSC expects the deal to create synergies for SinoPac Financial as their businesses are complimentary.
Photo: CNA
King’s Town Bank is based in southern Taiwan, while the branches and offices of SinoPac Financial are largely in the north, he said.
After the acquisition, which was announced in December last year and is to proceed through a cash-stock swap for almost NT$60 billion (US$2.03 billion), the number of Bank SinoPac branches is expected to increase to 191, the second-largest in the local banking sector, up from 12th place, he added.
King’s Town Bank has 66 branches, including 43 in Tainan, and Yunlin and Chiayi counties, and five in Kaohsiung, while most of Bank SinoPac’s 125 branches are located in the north.
The combined assets of Bank SinoPac and King’s Town Bank are expected to rise to NT$3 trillion, making Bank SinoPac the 12th-largest bank in the nation, up from 13th spot, Wang said.
For SinoPac Financial, its total assets are to rise to NT$3.5 trillion to become the 13th-largest financial holding firm in the nation, up from 14th place, he said.
In addition, Bank SinoPac is expected to account for 4.24 percent of total bank deposits in the nation, up from 3.74 percent, boosting its ranking from 13th to 12th. It is expected to account for 4.37 percent of total lending, up from 3.79 percent, pushing up the bank’s ranking from 14th to 12th, he added.
Wang cited a plan submitted by SinoPac Financial as saying it hopes to complete the acquisition by the end of next year. After the acquisition, King’s Town Bank would be delisted from the local bourse.
SinoPac Financial has promised to retain about 700 employees currently working for King’s Town Bank, Wang said.
SinoPac Financial chief financial officer Kerry Hsu (許如玫) has said the company would issue new shares to finance the acquisition, adding that the new shares could dilute its earnings by 9.15 percent, but the financial impact would be limited.
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