Bank Blues

Out filming with the FTV crew again this weekend.

Bloomberg has an interesting article on the difficulty US financial firms are having with using Taiwan banks to enter the China market and the low value of Taiwan banks...

"Taiwanese banks were attractive to the PE firms because they were seen as having a better chance of expanding into the mainland than international rivals,” Chuang Piyen, a Taipei-based banking analyst at Mega Securities Co., said by telephone on Sept. 30. “Unhealthy banks were targeted because they could be turned around and sold at a good price.”

Carlyle and a partner bought a stake in the Taiwanese lender, which had posted a NT$5 billion loss for 2006 on bad-loan provisions, for $650 million at the end of the next year. The buyout firm holds about 24 percent of Ta Chong, according to the Taipei-based lender’s 2012 annual report.

Since then, Ta Chong has slipped to No. 23 among 39 domestic banks ranked by assets, from No. 21 in 2007.

“We believe the likely M+A within domestic Taiwan in the near future will be at small banks owned by private equity, which are seeking exit strategies,” Jemmy S. Huang, an analyst for JPMorgan Chase + Co. in Taipei, wrote in a note to clients in May. “Pricing will be key.”

The article is quite informative and should be read in its entirety. I hope to have increased coverage of this sector soon...
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