Ta Chong Bank Ltd (大眾銀行), the Taiwanese lender controlled by Carlyle Group LP, will woo retail customers with a “McDonald’s strategy” and boost profit fivefold by 2012 to attract potential buyers, president Edmund Koh (許健州) said.
The bank, with 69 branches and about 2,800 employees, had net income of about NT$1 billion ($31 million) last year, Koh said in an interview in Singapore last Wednesday. Ta Chong also aims to triple return on equity to 15 percent, he said.
Ta Chong, a target when buyout firms consolidated Taiwan’s banking industry in 2006 and 2007, has surged 57 percent in Taipei in a year as talks between China and Taiwan may make it possible for lenders to invest across the Taiwan Strait. Koh said he’s taking a cue from McDonald’s Corp, the world’s largest restaurant chain, to make branches more attractive to clients with features including drive-through banking.
SITTING PRETTY
“All I know is in the meantime, I’m going to sit there looking prettier each day,” he said. “Hopefully a suitor comes along and knocks on my door.”
Carlyle, the world’s second-biggest private-equity firm, teamed up with Cayman Islands-based Gable Partners II LP to pay NT$17 each for Ta Chong’s common and preferred shares in July 2007, or a total of NT$21.5 billion for a 36 percent stake including bonds convertible into stock. The stock advanced 1.8 percent to NT$6.40 yesterday.
Carlyle owns 27.8 percent of the bank, making it the biggest shareholder. On a “fully diluted” basis, Carlyle’s stake would rise to 40.8 percent, Ta Chong said.
Koh was hired by Carlyle in March 2008 from Singapore’s DBS Group Holdings Ltd (星展集團), where he was head of regional consumer banking. He said the bank’s focus for this year is on increasing brand awareness, because it’s “never going to be 200 branches or 300 branches,” and boosting fees from wealth management and small and medium-sized companies.
Efforts to make Ta Chong’s outlets more visible may include tying up with cafes, drive-through banking and parking facilities in what Koh calls the “McDonald’s strategy.” At least 12 branches will get a makeover this year.
TOILET
“You buy a burger for something like US$3, and you can use the toilet, you can rest, you can park your car,” he said. “You give the bank a million dollars and you can’t do that? I’m trying to change that.”
Ta Chong bought a small credit cooperative last year, adding 16 outlets. It will relocate 10 of the branches to Taipei this year. Koh said he will seize acquisition opportunities to expand the branch network in Taipei, Hong Kong and China, aiming to serve entrepreneurs doing business in the latter.
Seven former DBS executives are on Koh’s team, including chief operating officer Chew Mun Yew (趙明耀) and consumer banking head Raymond Ang (洪子羽). Koh said he was attracted to Ta Chong because of the chance to become “a small part-owner” in the bank.
“When we came in, we cut our hair and improved our diet by trimming our bad debts, so we look better,” Koh said. “Now we have to make up and dress up, which is our branding, so that’s where we are.”
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