05.21.2001
UWCCB mulling an array of merger options

• UWCCB (2826 'Shi Hua Yin') has admitted for the first time that Lin Yuan Group, Fubon Group and Taishin International Bank (2844 'Tai Xin Yin') have approached the bank for merger discussions. Lin Yuan and Fubon would prefer to merge under the structure of a financial holding company.
  UWCCB has also been in contact with two or three other banks on the question of M&A. Acquisition costs have been discussed but no agreement has yet been reached. If UWCCB opts to form a financial holding company, it will likely be a choice between Lin Yuan and Fubon.

• Lin Yuan holds 3.5% of UWCCB and Fubon 8.5%. They both have seats on the board of UWCCB.

• VB Primasia Investment Opinion: We believe a merger could help UWCCB expand into securities and insurance, an area where the bank is lacking. UWCCB boasts good operational efficiency and asset quality. BUY.

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