Fubon projects first financial holding company in Taiwan

Alfred Lee, The China Post

Fubon Group is working to become the first financial holding company in Taiwan, announced the top executives of the group at a meeting with the institutional investors yesterday. The meeting was presided over by Daniel M. Tsai and Richard M. Tsai, vice chairman of Fubon Group. According to Fubon’s plan, Fubon Insurance Co., Ltd. will become the surviving holding company and it would acquire Fubon Bank, Fubon Stock, Fubon Securities Investment Trust, and Fubon Life Insurance through exchange of stocks.

The Fubon Group plans to hold a board meeting on Sept. 3 to discuss the percentages of the stock swap among its member companies. The group is expected to hold a shareholders’ meeting in October to pass the resolution for setting up the financial holding company.

The net assets of the five Fubon companies are estimated at NT$120 billion. Earlier, Fubon forged a cooperation alliance with Citibank, and was regarded as one of the most well-managed financial institutions, which would be qualified to set up a financial holding company. In recent months foreign institutional investors have been buying up stocks of Fubon Group companies. Last month foreign institutional investors purchased 22.224 million shares of Fubon Bank’s stock, and caused a 16.2 percent growth of its stock prices. Fubon Bank registered a pre-tax profit of NT$1.72 billion in July with an earning per share of NT$0.84.

Foreign institutional investors last month purchased 12.912 million shares and 1.761 million shares of Fubon Insurance and Fubon Stock, which sent their stock prices up 11.7 and 6.1 percent, respectively. Fubon Stock posted a pre-tax profit of NT$1.9 billion with an EPS of NT$0.93. In addition to the five Fubon companies to be merged in the first phase of Fubon Group’s establishment of financial holding companies, the other Fubon companies may be integrated in its second phase plan for forming financial holding companies. The phase one will take about half a year to integrate the five companies.