03.07.2001
Fubon to form Taiwan's first financial holding company

• Fubon Commercial Bank (2842 'Fu Bang Yin') is preparing to establish the first financial holding company in Taiwan. The bank expects the proposed new regulations on financial holding companies to become law in 1H01.

• The company is aiming for total equity of NT$130b, much larger than the target set by China Development and Industrial Bank (2804 'Kai Fa') for its planned financial holding firm. Citibank holds around 15% of all Fubon Group subsidiaries, and will maintain 15% control of the holding company.

• Fubon and Citibank are looking to expand in Taiwan. Fubon hopes to increase market share to 8% from 3% by increasing, through merger, its number of branches to over 100. It will also expand consumer banking and aims to become the No.1 credit card issuer in Taiwan.

• Fubon ranks third in terms of credit card issue, trailing Chinatrust Commercial Bank (2815 'Zhong Xing Yin') and Taishin International Bank (2844 'Tai Xin Yin'). We expect competition in consumer banking to get keener in the future. Some small banks may be forced to merge in order to survive.

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