03.22.2001
Cathay Life increasing shareholdings in E. Sun Bank

• Cathay Life Insurance (2805 'Guo Shou') continues to increase its shareholdings in E. Sun Bank (2840 'Yu Shan Yin'). Shareholdings have increased to 10% from 4.97% at the beginning of the year.

• Cathay claims it is interested in enhancing cooperative relations with the bank and is not considering a merger at the moment.

• There is also no plan to merge with Cathay United Bank (CUB, 2835 'Hui Tong Yin'), which the insurance giant controls. CUB is currently striving to strengthen its financial condition amid prevalent M&A sentiment in the banking sector.

• With the passing of the Financial Holding Company Law, likely to come by 2Q01, we expect more financial groups, including the parent company of Cathay Life, Lin Yuan Group, to speed up the formation of their financial holdings structure.

• Given E. Sun's respected position in consumer finance, we believe closer relations will furnish Cathay Life with an effective channel through which to deliver insurance products. WilliamFong@Primasia.com (886 2) 2547-8864

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