Fubon spends NT$30.6 bil. to enlarge China business empire

The financial company yesterday said it will spend 5.65 billion yuan to acquire from First Sino an 80-percent stake, which will be split 29-51 between the parent financial corporation and its subsidiary Taipei Fubon Bank. The remaining 20 percent will continue to be held by Shanghai Pudong Development Bank (SPDB).

Meanwhile, First Sino has announced a 1-billion-yuan capital increase plan that Fubon Financial, Taipei Fubon Bank and SPDB will participate in. The amount of money they spend will be based on the stake they hold in the firm.

Overall, Fubon Financial will invest a total of 6.45 billion yuan in First Sino, or about NT$30.6 billion.

“Purchasing an 80-percent stake in First Sino is a critical step in our continued expansion in China,” said Tsai Ming-chung, chairman of Fubon Financial. “Once the deal is completed, Fubon's business empire in the Greater China region will include Taipei Fubon Bank, Fubon Bank (Hong Kong), Xiamen Bank in which we have a 19.99-percent stake, and First Sino, in which we have an 80-percent stake.”

First Sino was founded in 1997 as a joint venture between Chinese and foreign businesses. It now has four regional offices and 10 branches, which are spread from the Yangtze Delta Region to the Pearl Delta Region.

Last year the bank had return on equity of 13.5 percent, nonperforming loan ratio of 0.15 percent and coverage ratio of 927 percent.

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