Yuanta Bank set to acquire South Korean counterpart
Yuanta Commercial Bank, the banking unit of Taiwan-based Yuanta Financial Holding Co., has agreed to acquire South Korea’s Hanshin Savings Bank. The deal marks the first acquisition by a Taiwanese bank in the South Korean market.
Under the plan approved by Yuanta Bank’s board of directors, the Taiwanese bank will spend 135.10 billion South Korean won or about NT$3.65 billion (US$112 million) to acquire a 100 percent stake in Hanshin bank.
The acquisition deal is pending approval from shareholders of both banks and from financial authorities in Taiwan and South Korea. After the deal is completed, Hanshin will become the second overseas subsidiary of Yuanta Bank. Its first overseas unit, Tong Yang Savings Bank Inc. in the Philippines, was acquired earlier this year.
It was the second buy-in deal announced by Yuanta Bank in less than 10 days. On Aug. 13, the bank said that it will spend NT$56.55 billion to acquire a 100 percent stake in Taiwanese rival Ta Chong Bank.
Yuanta Bank said that with trading and investment activity between Taiwan and South Korea continuing to grow, it is worth seeking business opportunities in the Korean market through such a buy-in deal. It added that South Korea has great potential to grow.
According to Yuanta Bank, as of the end of 2014, Taiwan’s investments in South Korea totaled US$ 780 million, while South Korea’s investments in Taiwan surpassed US$1 billion. Both sides are eyeing each other’s financial, electronics and services sectors.
Yuanta Bank said that Hanshin bank was established in 1988 and is headquartered in Seoul. Currently, the Korean bank operates two branches in the capital city of South Korea.
As of the end of March, Hanshin bank had a paid-in capital of about NT$1.825 billion, total assets worth NT$9.221 billion and net worth totaling NT$4.73 billion, Yuanta Bank said. Hanshin also held NT$4.35 billion in deposits and extended a total of NT$1.42 billion in loans as of the end of the first quarter, Yuanta Bank added.
Ahead of the deal to buy Hanshin bank, Yuanta Securities, the flagship securities operations of Yuanta Financial, already owned a 52.17 percent stake in Yuanta Securities South Korea Co.
Yuanta Financial said that the financial holding companies will take advantage of the presence of Yuanta Securities South Korea and Hanshin bank to further penetrate the financial market in South Korea.
Meanwhile, a board meeting of Ta Chong Bank held Friday approved a deal for Yuanta Bank to buy a 100 percent stake in Ta Chong.
After the acquisition deal, which is scheduled to be completed in the first quarter of next year, the number of Yunata Bank branches in Taiwan will increase from 88 to 155 and the bank’s total assets will expand to NT$1.25 trillion.