10.04.2001
Bank SinoPac accelerating FHC plans

• Development: Bank SinoPac hopes to benefit from consolidating operations and businesses with National Securities (6001.TT) in forming an FHC. The number of combined branches and offices will total 80. Company estimations suggest the consolidation will generate profits of NT$4.2bn over three years through cost reduction and cross selling.

• Analysis: We believe co-operation between the firms will benefit SinoPac in the long run. However, owing to differing corporate structures and management styles, we expect it to take over a year before the bank sees the benefits of cross selling.

• Primasia View: We believe the bank’s current share price already reflects some of the potential benefits of consolidation.