Standard Chartered buys Taiwanese bank for $1.2 billion

UK bank Standard Chartered, which derives most of its profits from Asian markets, has purchased Taiwan's Hsinchu Bank for $1.2 billion.

The purchase makes Standard Chartered a major player in the Taiwanese market. US banking giant Citibank is the only other western bank with a substantial presence in the region.

Standard Chartered will be funding the deal through a $1.2bn share placement. According to a report in the Telegraph newspaper, the deal is valued at over twice Hsinchu Bank’s net value. The same report also suggests that the acquisition is expected to begin yielding a double digit return in 2008.

Mervyn Davies, chief executive of Standard Chartered, was quoted in the Telegraph as saying: Hsinchu is an outstanding opportunity to grow Standard Chartered’s presence in one of our core markets. We will drive further growth by combining Standard Chartered and Hsinchu’s products and processes as we have done successfully in other markets.