February 10, 2006
Following fourteen months of negotiations, GE Consumer Finance and Cosmos Bank finalized an agreement at the end of January under which the financial investment firm plans to ultimately acquire a 24.9% share of the bank's stock. This plan, which calls for a total investment by GE of
NTD 9 billion, would make GE the single largest shareholder in Cosmos Bank and give it two seats on the bank's board of directors.
While GE looks forward to using this opportunity to develop a platform in Taiwan from which to expand its operations in Asia, Cosmos Bank stands to gain from GE's management skills and product development knowledge. Taiwan is the fourth largest financial market in Asia.
Of the 46 local banks in Taiwan, Cosmos counts as the 24th-largest provider of financing. However, it has been particularly successful in the consumer finance sector. Its George and Mary credit cards are among the most popular in the nation and it is the biggest issuer of cash-advance cards, with 868,772 cards circulating as of the end of November.
Taiwan's government has been pushing for mergers in the nation's financial sector in order to reduce excessive competition and increase the international competitiveness of Taiwanese banks. The government is also reported to be aiming to have at least one domestic bank operated by foreign investors.
It is reported that GE received government approval in July 2005 to acquire up to a 49.9% stake in Cosmos Bank.
(United Daily News, Taipei Times)
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