02.15.2001
Foreign group plans to acquire Chung Shing Bank

• An undisclosed foreign bank is planning to acquire more than 50% ownership in Chung Shing Bank (2846 'Zhong Xing Yin') in coming months. Chung Shing will hold a board meeting in April when the foreign bank hopes to make its stake.

• Chung Shing ran into financial problems last year, suffering losses and seeing a drop in equity value, after making excessively large loans to troubled enterprises. It has been operating under the supervision of the Ministry of Finance (MoF) for nearly ten months, a record in the banking industry.

• The MoF has been providing solutions to the bank's problems, for example its previous plan to merge with Taipei Bank (2830 'Bei Yin') and several high-tech companies. However, the plans have not come off as stock market volatility has forced the companies to withdraw. We believe foreign acquisition is a good option for Chung Shing if it is to survive in Taiwan's competitive banking industry..

WilliamFong@Primasia.com +886-[0]2-2547-8864