Taiwan bank in talks with DBS, seeks top partner

TAIPEI - FAR Eastern International Bank, a Taiwanese lender, said it seeks a strategic alliance with a world-class financial company.

It added that it has been in talks with Singapore's DBS Group Holdings.

While discussions with DBS have been taking place for the past two to three years, 'no conclusion has been reached', the Taipei-based company said in a statement to the Taiwan Stock Exchange yesterday.

Far Eastern is the banking arm of Far Eastern Group, which controls the island's largest textile company and has units in shipping, mobile-phone services and retailing.

Far Eastern did not define 'strategic alliance' or say if it seeks partnerships only with overseas banks. Neither did it provide more details on its talks with DBS.

The government encourages mergers and acquisitions (M&As) in the financial sector to reduce the number of banks on the island.

Far Eastern said last June that it was in initial talks with potential buyers, and in October said it may sell a majority stake for the right price.

The bank's shares surged by the daily limit on Jan 25 after a news report said it may sell a 51 per cent stake to ABN Amro, which Far Eastern denied.

The Chinese-language Economic Daily News reported last November that Far Eastern might sell a 60 per cent stake to HSBC within a year in three phases.

This came after Far Eastern chairman Douglas Hsu said the month before that the lender could be willing to sell a majority stake for the right price.

The Taiwanese market has been speculating since last year that the local lender would form a strategic alliance with foreign investors, or sell a stake to the latter.

The company's statement yesterday came after the Chinese-language Commercial Times reported that DBS may buy a stake in the Taiwanese lender after completing due diligence on Far Eastern Bank.

'It's our policy not to comment on market speculation or M&A activity,' DBS spokesman Jenny Lee said in a phone interview.

Far Eastern, one of 16 lenders established in the early 1990s after the government liberalised the banking industry, is Taiwan's 18th-largest listed financial company by market value.

It has 35 branches on the island, according to its website.

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