Land Bank of Taiwan planning NT$2 billion IPO
By John Liu ,The China Post
August 12, 2014, 12:03 am TWN
TAIPEI, Taiwan -- Land Bank of Taiwan (土地銀行) may launch an initial public offering to raise NT$2 billion as early as 2016.
After the IPO, the bank's Tier 1 capital, which consists mainly of common stock or retained earnings, is expected to increase to 8.5 percent. The government will keep more than 70 percent of the bank's equity.
In the inauguration ceremony, former Mega Financial Holding Co. (兆豐金控) President Hsu Kuang-shi (徐光曦) formally took over as the president of Land Bank of Taiwan yesterday.
Land Bank of Taiwan makes about NT$10 billion annually, and has an EPS of NT$2, Hsu said, adding that, however, there is room for improvement, such as the company's insufficient Tier 1 capital. And this is the primary reason for the bank to launch an IPO, said Hsu.
According to Hsu, Land Bank of Taiwan is a very profitable company, and with sufficient capital, the bank may still make headway into more businesses. This is likely to benefit the company's employees.
Land Bank of Taiwan is considered the nation's bellwether provider in real estate loans. The bank has NT$1.87 trillion worth of outstanding loans, 52 percent of which goes into real estate. According to Hsu, the bank already has too much exposure in real estate loans, and it will strive for a more diversified portfolio in the future, lowering costs while growing profits in the process.
Land Bank of Taiwan currently has a net asset value of NT$116.6 billion with a NT$23.31 book value per share. The IPO is expected to raise the bank's asset quality.
Land Bank of Taiwan Vice President Huang Chung-Min (黃忠銘) estimated that the IPO will be carried out within three years, or in 2016 at the earliest.