HSBC to acquire local bank in Taiwan for expanded presence
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20:05, December 14, 2007
The British banking giant HSBC announced Friday it has succeeded in bidding for the Chinese Bank, a local bank in China's Taiwan, with gross assets totaling 3.1 billion U.S. dollars.
"The acquisition will increase HSBC's island-wide branch network from 8 to 47, giving it a presence in all the major cities," the London-based bank said in a statement, adding that Taiwan was one of the biggest banking market in the region.
HSBC, or the Hongkong and Shanghai Banking Corporation Limited, did not disclose the cost of the acquisition, but said it would assume the assets, liabilities and operations of the Chinese Bank with a payment to deliver an agreed net asset position.
The Central Deposit Insurance Corporation (DCIC), an insurance company in Taiwan which has been controlling the Chinese Bank since January, said that HSBC offered 47.49 billion new Taiwan dollars (1.47 billion U.S. dollars) in the auction.
The transaction was yet to be approved by regulatory authorities of Taiwan.
HSBC said it would also provide certain additional capital to ensure that its enlarged operations maintain appropriate financial ratios, adding that the amount of the injection was estimated to be between 300 million and 400 million U.S. dollars.
The Chinese Bank has 36 branches and over 1 million customers throughout the island and provides a full range of services to retail customers and enterprises.
Under the agreement, HSBC would be able to convert three business offices of the bank into new branches, boosting the total number of the firm's branches to 39.
HSBC had eight branches in Taiwan, one of Asia-Pacific's wealthiest economies.
"The Chinese Bank will provide HSBC in Taiwan with significant opportunities in retail, commercial and corporate banking," said Alistair Currie, chief executive officer of HSBC in Taiwan.
"We believe HSBC's international network, global expertise and financial strength will benefit our new customers and employees here," he added.
