14th Dec 2007 08:16
HSBC Holdings PLC14 December 2007 HSBC TO ACQUIRE THE CHINESE BANK IN TAIWAN ***Delivers a presence in every major city*** ***Integral to Greater China growth strategy*** The Hongkong and Shanghai Banking Corporation Limited has been named thesuccessful bidder in a government auction to acquire The Chinese Bank Co., Ltd.(The Chinese Bank) in Taiwan. The acquisition will increase HSBC's island-widebranch network from eight to 47, giving it a presence in all the major cities inAsia's fourth biggest banking market. The Taiwan Government's Central Deposit Insurance Corporation (CDIC) tookcontrol of The Chinese Bank in January 2007. As at 30 September 2007, grossassets were NT$100.16 billion (approximately US$3,097 million). The agreementrelating to this acquisition will result in HSBC assuming The Chinese Bank'sassets, liabilities and operations with a payment by the CDIC to deliver anagreed net asset position. In addition, HSBC will provide certain additionalcapital to ensure that its enlarged operations maintain appropriate financialratios. The amount of such additional capital will be determined by reference tothe balance sheet as at completion. Based on information currently available, itis estimated that this will be between the Taiwanese dollar equivalent of US$300million to US$400 million. The Chinese Bank has 36 branches and over one million customers throughoutTaiwan. It provides a full range of services to retail customers as well assmall-to-medium size enterprises and large corporates. Under the terms of thetransaction, HSBC will also be able to convert three business offices of TheChinese Bank into new branches. Vincent Cheng, Chairman of The Hongkong and Shanghai Banking CorporationLimited, said: "Taiwan is a key component of HSBC's Greater China positioning.Over 750,000 Taiwanese companies currently operate in China and there was US$7.6billion of foreign direct investment from Taiwan in 2006, up over 180 per centyear-on-year. Together with our market leading franchise in Hong Kong andposition as the largest foreign bank in China, HSBC is strongly positioned tobenefit from the growing level of trade and investment in Greater China andacross the region." One of Asia-Pacific's wealthiest economies, Taiwan is growing significantlyfaster than the major western industrialised economies, with GDP in recent yearsexpanding at an annual rate of almost five per cent. Domestic demand is expectedto strengthen over time as household income expands and long-term savings andinvestments grow as individuals increasingly choose to plan for their futures. Alistair Currie, Chief Executive Officer of HSBC in Taiwan, added: "The ChineseBank will provide HSBC in Taiwan with significant opportunities in retail,commercial and corporate banking, while we believe HSBC's international network,global expertise and financial strength will benefit our new customers andemployees in Taiwan." The transaction is subject to obtaining the necessary regulatory approvals.In accordance with the terms of the transaction, HSBC is required to establish alocal subsidiary within three years of completion or one year after HSBC's totalassets in Taiwan exceed NT$450 billion (approximately US$13.9 billion),whichever is earlier. The new company will have a minimum capitalisation ofNT$10 billion (approximately US$309 million). Notes to editors: 1. HSBC in TaiwanHSBC's presence in Taiwan dates back to 1885 when The Hongkong and ShanghaiBanking Corporation Limited appointed an agent. A full service branch wasestablished in Taipei in 1984. The bank currently has a network of eightbranches and employs some 2,300 staff. HSBC provides a full range of insurance,personal, commercial, corporate and private banking services to its customers inTaiwan. In 2007 HSBC acquired one of Taiwan's leading factoring companies,Chailease Credit Services, opened a new life insurance company and is now addingthe operations of The Chinese Bank to its growing presence in Taiwan. 2. The Hongkong and Shanghai Banking Corporation LimitedThe Hongkong and Shanghai Banking Corporation Limited is the founding and aprincipal member of the HSBC Group which, with over 10,000 offices in 83countries and territories and assets of US$2,150 billion at 30 June 2007, is oneof the world's largest banking and financial services organisations. 3. The Chinese Bank Co., Ltd.The Chinese Bank was one of the private banks approved for operation in thefirst wave of liberalization of Taiwan's financial sector in 1990. The ChineseBank has 36 branches located in major cities in Taiwan. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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