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CTBC Financial shares soar on China deals

CTBC Financial shares soar on China deals

Taipei, May 27 (CNA) Shares of CTBC Financial Holding Co. (???), one of Taiwan's leading financial holding companies, jumped Wednesday morning after the company announced that subsidiary CTBC Bank (???) will acquire a 100 percent stake in China CITIC Bank International Ltd., dealers said. The buying also reflected optimism over CTBC Financial's ambitions to set up a strategic partnership with the Chinese bank's parent company China CITIC Bank Corp Ltd. through another deal in which China CITIC Bank Corp. plans to acquire a stake in CTBC Bank, they said. As of 11:09 a.m., shares of CTBC Financial had added 3.93 percent to NT$23.80 (US$0.77), with 74.88 million shares changing hands. The financial sub-index was up 1.01 percent, while the weighted index on the Taiwan Stock Exchange was up 0.31 percent at 9,699.31. "These deals showed that CTBC Financial has been moving very aggressively to lay down its plans for the China market," Hua Nan Securities analyst Kevin Su said. "Through acquisitions and mergers, CTBC Financial is expected to take the lead over its peers in expanding its reach in China." In a statement released Tuesday, CTBC Financial said CTBC Bank will spend NT$11.67 billion to acquire China CITIC Bank International. In turn, CTBC Bank will launch a private placement in which China CITIC Bank will acquire a 3.8 percent in the Taiwanese bank. China CITIC Bank is under the corporate umbrella of the CITIC Group, one of China's financial giants. China CITIC Bank International currently has three outlets in Shenzhen, Shanghai and Beijing. Its parent China CITIC Bank is the ninth largest bank in China and has 1,230 outlets around China. "It is estimated that the partnership is expected to put CTBC Financial about three years ahead of its Taiwanese rivals in terms of the pace at which they are expanding into China," Su said. In a third deal announced by CTBC Financial on Tuesday, CTBC Bank will team up with Huishang Bank, the Hefei Department Store Group, and Chinese retail and property company GOME Holding Group to open a 1 billion Chinese yuan (US$161 million) consumer financing company, in which CTBC Bank will have a 35 percent stake. "I think the joint venture will target the booming credit card business in China. The joint venture shows CTBC Financial's ambition," Su said. The three deals still need approval from authorities in China and Taiwan, according to CTBC Financial. "It was no surprise that investors rushed to buy into CTBC Financial shares this morning in the wake of the three deals, which served as strong incentives to investors," Su said. "Buying in the financial sector has been more visible at a time when the local bellwether electronics sector has appeared slow in recent sessions." Su said he suspected foreign institutional investors were big net buyers of CTBC Financial shares after news of the China deals surfaced Tuesday. According to Su, foreign institutional investors had bought a net 485 million CTBC Financial shares as of the end of trading Tuesday since the beginning of April. (By Tien Yu-pin and Frances Huang)


Updated : 2021-09-19 18:24 GMT+08:00