Taiwan's CTBC Seeks Southeast Asia Link With Thailand Bank Deal

  • Taiwan encouraging lenders to make overseas acquisitions
  • $469 million deal follows moves by Cathay Financial Holding

Taiwanese insurer CTBC Financial Holding Co. plans to purchase a 35.6 percent stake in LH Financial Group Pcl for 16.6 billion baht ($469 million) as it seeks to expand into Southeast Asia.

The acquisition by the Taipei-based company’s CTBC Bank subsidiary would make it the largest shareholder, along with the Land & Houses Group, CTBC said in a statement released Tuesday in Taipei. LH Financial is the Bangkok-based parent of LH Bank.

“Thailand’s banking industry has seen steady development and various profitability benchmarks have maintained steady growth in recent years,” CTBC Financial President Wu I-Kui said in the statement. “At the center of ASEAN, Thailand plays a key role in the integration between China and Southeast Asia.”

Taiwan is pushing its lenders to make overseas acquisitions amid fierce competition at home. The island’s largest listed lender by market value, Cathay Financial Holding Co., took stakes in the Philippines’ Rizal Commercial Banking Corp. and Indonesia’s PT Bank Mayapada International through its life insurance unit. The top three Taiwanese financial companies have only a 20 percent market share locally and the industry is overcrowded, the island’s former top financial regulator said in July.

CTBC, Taiwan’s fourth-largest listed lender, along with Taipei-based Fubon Financial Holding Co. and Japan’s Mitsubishi UFJ Financial Group Inc., was previously said to be exploring the purchase of a stake in Jakarta-based PT Bank Pan Indonesia. Fubon, Taiwan’s second-largest financial services firm, acquired 48 percent of South Korea’s Hyundai Life Insurance Co. in December.

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