Taiwan's CTBC to buy RBS assets in Malaysia for US$314 million

[TAIPEI] Taiwan's CTBC Financial Holding Co. said it plans to purchase the Malaysian assets of Royal Bank of Scotland Group Plc for US$314 million, marking another step in the British bank's retreat from its overseas operations.

The board of the Taipei-based firm approved the purchase of Royal Bank of Scotland Bhd for US$189.7 million, CTBC said in a statement on Friday. The company's banking subsidiary will also buy RBS's offshore banking unit in Labuan for US$123.9 million. An agreement has yet to be signed and the deal requires regulatory approval, CTBC said.

The latest move comes about two weeks after CTBC revealed plans to purchase a 35.6 per cent stake in Thailand's LH Financial Group Pcl for about US$470 million.

Taiwan is pushing its lenders to make overseas acquisitions amid fierce competition at home. The top three Taiwanese financial companies have only a 20 per cent market share locally and the industry is overcrowded, the island's former top financial regulator said in July.

The island's largest listed lender by market value, Cathay Financial Holding Co, has bought a stake in the Philippines' Rizal Commercial Banking Corp and announced plans to buy shares in Indonesia's PT Bank Mayapada International, through its life insurance unit.

For RBS, the sale marks the continuation of a wind-back of its offshore operations following a £45.5 billion (S$87.7 billion) taxpayer-funded rescue at the height of the global financial crisis, which gave the British government a majority stake in the Edinburgh-based lender.

Chief Executive Officer Ross McEwan is trimming RBS's corporate and institutional banking unit, exiting 25 countries around the world to focus on consumer and commercial lending in the UK and Ireland.

RBS shares gained 1.5 per cent as of 10.40 am in London, the highest intraday level since March 21, and paring its slump this year to 23 per cent. The FTSE All-Share Banks Index added 0.2 per cent.

BLOOMBERG