Two PE funds in talks to buy Taiwan bank

TAIPEI, April 16 (Reuters) - Two foreign private equity funds are in early talks to invest in Sunny Bank, a small Taiwan lender, a source close to the bank said on Wednesday, marking the latest interest by foreign investors in Taiwan banks.

The investment banking source declined to reveal the investor names. But a report in the Chinese language Commercial Times on Wednesday said they are Carlyle Group [CYL.UL] and MBK Partners.

"Two foreign investors have asked us to do due diligence on their behalf on Sunny Bank's financial books," said the source, who requested anonymity.

"Things are at an early stage. Nothing has been been worked out in issues like the size of the deal or a timetable to close the deal."

Sunny Bank officials could not be reached for comment.

Both of the private equity funds aimed to take a stake of 25 percent or more in Sunny Bank, according to the Commercial Times report. Taiwan's banking industry, the fourth-biggest in Asia, has been a hotbed of interest from private equity investors and global major banks such as Citigroup (C.N: Quote, Profile, Research, Stock Buzz) and HSBC (0005.HK: Quote, Profile, Research, Stock Buzz), in part because banking stocks were cheaper than regional peers.

Another major expectation is the stronger outlook for Taiwan banks this year, as the island's President-elect Ma Ying-jeou favours closer business ties with China.

Foreign banks also see big potential in the local wealth management business. They hope to cater to wealthy individuals who have made their fortunes in China.

Sunny Bank, which is not publicly traded, has more than 80 branches on the island. Its assets were around T$300 billion ($9.91 billion), said the source.

Carlyle and another foreign investor paid T$21.5 billion last year for a 35 percent stake of Taiwan's Ta Chong Bank (2847.TW: Quote, Profile, Research, Stock Buzz). MBK Partners has also done a deal in Taiwan, acquiring a local cable TV operator. (US$1=T$30.26) (Reporting by Faith Hung; Editing by Doug Young and Ken Wills)