(29 May 2017 – Taiwan) Cathay Financial Holding Co., one of Taiwan's largest financial holding firms, has agreed to acquire the Canada-based Bank of Nova Scotia's banking assets in Malaysia as part of the Taiwanese banking group's efforts to extend its reach in the Association of Southeast Asian Nations (ASEAN).
Cathay Financial said that it will spend US$255 million (A$343 million) to acquire the Canadian bank's subsidiary through Cathay United Bank and Cathay Life Insurance Co., two wholly-owned units of the Taiwanese financial conglomerate.
The acquisition deal is pending regulatory approval from both countries’ regulators, and is expected to be finalised in the second half of 2017, Cathay Financial said.
After the deal is finalised, Cathay United Bank is expected to own a 51-percent stake in the Bank of Nova Scotia Berhad and become the first Taiwanese bank to have a subsidiary in Malaysia, while Cathay Life will hold the remaining 49 percent, the financial holding firm said.
The Bank of Nova Scotia Berhad currently runs three branches in Kuala Lumpur, Penang and Johor Bahru and specialises in corporate banking with customers in the financial, agricultural and manufacturing sectors.
The acquisition is expected to allow Cathay United Bank to conduct Ringgit-denominated business in the Malaysian market, Cathay Financial said.
Lee Chang-ken, president of Cathay Financial, said the deal will allow the financial group to have a larger network in the region.
Lee added that he is upbeat about the Malaysia banking sector since the country ranks as the third largest economy in the ASEAN and the acquisition is a strategic deal for Cathay Financial to penetrate the region.
In addition to Malaysia, Cathay United Bank currently operates branches or representative offices in Singapore, Hong Kong, Thailand, Laos, Vietnam, Indonesia, Myanmar and the Philippines.