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Taiwanese financial groups seek M&A in SE Asia

Source: Asia Insurance Review | Apr 2015

At least two financial holding groups in Taiwan are seeking potential M&A in Southeast Asian markets.
 
Mega Financial Holding, a trade financing-focused conglomerate, is eyeing medium-sized life insurance companies and retail-focused banks as it seeks to grow into a regional powerhouse, reported Taipei Times.
 
The company reported NT$30.2 billion (US$958.5 million) in net income last year, as recovering economy at home and abroad boosted cross-border trade. 
 
With a 100% ownership of both Chung Kuo Insurance Company and Mega Life Insurance Agency Company, the group aims to expand into the life insurance business if it can find ideal acquisition candidates. It remains interested in expanding its client base by reaching out to more individual customers, so banks that specialise in consumer banking are also desirable, it said.
 
Mega Financial Holding also said it can apply for capital increases of between NT$15 billion and NT$20 billion, and carry out acquisition plans within three months once it secures a target.
 
Shin Kong looking at SEA and domestic securities market
Separately, Shin Kong Financial Holding has said that it is ready with more than NT$10 billion in funds to seek potential M&A in Southeast Asian markets. The group is studying markets, including Indonesia, Cambodia and the Philippines, considering banks that have more than a 5% risk-based capital (RBC) ratio.
 
Shin Kong Financial Holding has also prepared more than NT$100 billion for possible further investments in the domestic securities market, the company said.
 
Shin Kong Life Insurance is the group’s main subsidiary and its biggest source of income. The insurer is also among the biggest insurance companies in Taiwan. In a bid to increase investment returns and secure profitability this year, Shin Kong Insurance aims to raise its holdings of locally issued foreign-currency bonds to NT$200 billion by the end of this year.
 
Since late 2013, the Taiwanese government has been encouraging Taiwanese financial institutions to expand to other markets in the region.
 
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