Logo of Phnom Penh Post newspaper Phnom Penh Post - Taiwan bank buys UCB stake

Taiwan bank buys UCB stake

Taiwan bank buys UCB stake

union commercial bank
Pedestrians walk past a Union Commercial Bank branch in Phnom Penh yesterday. Photograph: Pha Lina/Phnom Penh Post

Taiwan's E Sun Commercial Bank has announced plans to acquire a 70 per cent stake in Cambodia’s Union Commercial Bank (UCB) for $69.33 million.

The acquisition will take place once certain procedures in the contract are implemented, according to a statement by E Sun’s Taiwan-listed parent, E Sun Financial Holding (ESFH), on the Taiwan Stock Exchange website.

The deal still needed to be approved by regulators in  Taiwan and Cambodia, ESFH president Joseph Huang said in a report in The Taipei Times on Saturday.

E Sun had planned to open its own branch in Cambodia after receiving the green light from Taiwan’s financial regulatory body last year.

But it decided instead to buy a stake in UCB, noting that the Cambodian bank “shares similar ideas about business development”, Huang was reported as saying.

“E Sun intends to copy its business model at the Cambodian lender to help boost its financial proficiency and scale of economies,” he said.

UCB had $330 million in assets as of December last year, making it Cambodia’s eighth-largest bank, with a 3.2 per cent market share.

Neither bank could be reached for comment.

UCB was founded in 1994. According to its annual reports, its net profit after tax in 2011 was $4.48 million — more than four times that in 2010 but slightly less than 2009's $4.56 million.

It is the latest local lender to be acquired by a foreign bank.

Last year, the Cambodia-based Singapore Banking Corporation and the OSK Indochina Bank were acquired by Taiwan’s Cathay United and Malaysia’s RHB Capital, respectively.

ANZ Royal chief executive Grant Knuckey said this trend was “not uncommon” for an emerging market such as Cambodia that had a growing number of opportunities “from the perspective of foreign banks”.

Knuckey foresees more acquisitions within five years.

“It is positive overall for the banking sector, as fresh capital and foreign banking expertise are coming in,” he said.

“Competition will increase, but it forces everyone to raise their standards, although it may lower returns for banks.

“Taiwanese banks have a natural customer base here, as many Taiwanese companies are already operating here.”

In an article in the Post last year, National Bank of Cambodia director-general Ngoun Sokha said she did not feel that such consolidations suggested the banking industry was “going down”.

“What we want is to fully encourage [local] banks to seek a strong partner when they see that we are not strong enough,” she said.

“We encourage them to consolidate to be stronger in the industry, as we are at that stage of development.”

To contact the reporter on this story: Low Wei Xiang at [email protected]

MOST VIEWED

  • No payment required for travellers taking rapid Covid tests on arrival

    Ministry of Health officials said there would be no payment required for the rapid Covid-19 tests given to travellers who arrive in Cambodia from November 15 onwards after the quarantine requirement is lifted for fully vaccinated people. Health ministry spokeswoman Or Vandine told The Post on

  • General’s gun smuggling ring busted

    The Military Police sent six military officers to court on November 22 to face prosecution for possession of 105 illegal rifles and arms smuggling, while investigators say they are still hunting down additional accomplices. Sao Sokha, deputy commander of the Royal Cambodian Armed Forces and commander of

  • More Cambodians studying in US

    The number of Cambodian students studying at US colleges and universities in 2020-21 increased by 14.3 per cent over the previous year despite the Covid-19 pandemic, according to a recent US government report. The 2021 Open Doors report on International Educational Exchange showed that 848 Cambodian students studied

  • Cambodia, Thailand to discuss border reopening

    Cambodian authorities from provinces along the Cambodia-Thailand border will meet with Thai counterparts to discuss reopening border checkpoints to facilitate travel, transfer of products and cross-border trade between the two countries. Banteay Meanchey provincial deputy governor Ly Sary said on November 22 that the provincial administration

  • Police arrest Canadian with 167kg of drugs

    The Phnom Penh Municipal Court on November 15 placed a Canadian national in pre-trial detention in connection with smuggling and possessing 167kg of illegal drugs. Deputy National Police chief in charge of anti-drug enforcement Mak Chito told The Post on November 15 that the man was arrested

  • Banteay Meanchey gunfight sees 15 Thais arrested, three officers injured

    The Banteay Meanchey Military Police have arrested 15 Thai suspects and their accomplices after a gun battle between two Thai groups caused injuries to three police officers in the early hours of November 21, local authorities said. National Military Police spokesman Eng Hy said that according to