The banks of Taiwan, once seen as avenues to inroads towards China, have increasingly become minefields for private equity firms. One of these equity firms, the Carlyle Group LP, had tried this avenue, making mainland China a moving target for those firms that seek big payouts from the region.
According to data compiled by Bloomberg, the Cosmos Bank of Taiwan, which is majority owned by SAC Capital, had lost nearly 66% of its value since 2007. Another bank, the Ta Chong Bank is backed by Carlyle, also took a dive at 9.5%. A third one, EnTie Commercial Bank, where one of the owners is Longreach Group Ltd, fell 19% for the same period.
Investments done more than five years ago in Taiwan's banking sector. Taiwan, as of five years ago, had about 1/10th percent of its investments in Assets overseas. The bourse is filled with uncertainty as the to stocks have been trading underwater, or selling shares below the cost of acquisition. The loan industry though had provided thin margins on the mainland and Southeast Asia, would deter foreign and local acquirers.
Cosmos and EnTie are amongst the worst performers for the year on the TWSE Financial and Insurance Industry Index. This index tracks 36 banks, as well as insurers and financial holdings firms. While the benchmark rose 15%, Cosmos and EnTie droped 20% and 4.4% respectively.
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