Taiwan’s Chinatrust Commercial Bank is in talks to buy the regional Tokyo Star Bank for about ¥50 billion in what would be the first acquisition of a Japanese bank by a foreign lender, it was learned Sunday.
Aiming to expand financial transactions in Japan, Taipei-based Chinatrust hopes to acquire nearly all of the common shares of Tokyo Star from its shareholders, including U.S. private equity group Lone Star, Japanese lender Shinsei Bank and French financial giant Credit Agricole, informed sources said.
After the turn of the year, Chinatrust will scrutinize Tokyo Star’s financial condition and discuss the terms of the acquisition with the shareholders to fix the purchase price, the sources said.
Chinatrust plans to go through with the deal after getting approval from the Financial Services Agency, the sources said.
Tokyo Star is the successor to Tokyo Sowa Bank, which collapsed in 1999. Advantage Partners LLP, the largest investment fund in Japan, acquired the bank for about ¥250 billion in 2008.
But the bank has been mired in an earnings slump since the global financial crisis exacerbated by the collapse of U.S. investment bank Lehman Brothers in 2008.
In 2011, Lone Star and other creditors that financed the acquisition took effective control of Tokyo Star shares put up as collateral and started looking for a buyer. Tokyo Star’s customer deposit balance stood at ¥2.06 billion as of Sept. 30. It has 31 offices in the Tokyo metropolitan area, Sapporo, Sendai, Nagoya, Osaka, Kobe, Hiroshima and Fukuoka.
Set up in 1966, Chinatrust has a network of 214 offices in Taiwan, Japan, and in other Asian countries, the United States and Canada. It offers a wide range of services, including derivatives and other financial products tailored to the wealthy.
With total assets of 1.89 trillion New Taiwan dollars, making it one of Taiwan’s largest commercial banks, Chinatrust is exploring further opportunities in Asia and North America.