SinoPac Financial Holding Co has rejected an acquisition offer by Taishin Financial Holding Co and prefers to merge instead with the International Bank of Taipei, Taishin said on Monday. Taishin Chairman Thomas Wu, head of Taiwan's eighth-largest financial firm, said that while some shareholders of SinoPac wanted to tie up with the larger Taishin, SinoPac's management ultimately preferred to merge with the small IBT.
"In the past almost two months, we've had many discussion meetings with SinoPac," Wu told a foreign media briefing.
"Some of the shareholders on the board actually preferred our offer. But then the management and the management team had different thoughts. I think they prefer to join IBT. It's in the best interest for them," he said.
A merger between IBT and SinoPac, would create Taiwan's seventh-largest financial company with nearly T$1 trillion in assets (US$32 billion).
When asked whether Taishin will consider other tie-ups, with foreign banks as well as other domestic lenders, Wu said: "Yes we are looking if there is a good target opportunity for cross-border merger and acquisitions. But before that, I think we should do a couple more in (the) domestic (market)."
He said alliances with government banks and competitive private banks would be ideal in improving the health of Taiwan's overcrowded banking sector, but declined to give details.
Taiwan regulators have been encouraging consolidation in the crowded banking sector to try to halve the number of financial holding companies to seven by the end of 2006.
The island has twice the number of banks as South Korea, although the island's population is only half as big.
Taishin has attracted 30 percent foreign equity ownership due to its good profitability in the highly competitive market.
Wu said he expects net profit to rise 20 percent to 30 percent in 2005, versus a forecast T$10.05 billion for 2004, and aimed to boost market share to 4 percent to 10 percent in three to five years from the current 3 percent.
The 2005 earnings estimate was in line with the 25 percent to 30 percent growth forecast by Taishin President Julius Chen in an interview with Reuters last December.
Taishin, which focuses on high-growth businesses such as fee income and wealth management, now has a branch in Hong Kong, a representative office in Vietnam and plans to venture into Los Angeles, Wu said.
The firm has about T$866 billion in assets and a market capitalisation of about T$128 billion, according to Wu.
His comments came after the close of Monday trade, when Taishin's shares fell 1.56 percent to T$28.40, while SinoPac fell 1.09 percent to T$18.10 and IBT fell 0.22 percent to T$22.90. That compared to the market's 0.28 percent dip.
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