First Pacific, FPB Bank Holding deny stake-sale talk

PUBLISHED : Wednesday, 14 October, 1998, 12:00am
UPDATED : Wednesday, 14 October, 1998, 12:00am

First Pacific and FPB Bank Holding are denying rumours they are selling their shares in First Pacific Bank (FPB).

The denial, made in a joint statement yesterday, came after reports indicated both companies were in negotiations with China Everbright Group for the disposal of their shares.

The firms denied negotiations were taking place, but added: 'First Pacific is continually engaged in reviewing strategic alternatives as regards each of its investments, including the banks . . . and has received interest from various parties.' Analysts cast scepticism over the rumours, saying that although the proposed sale of the bank was nothing new, China Everbright was unlikely to be the interested party.

'Buying FPB as a single entity would not make sense given the condition of the bank and its small number of branches,' an analyst said.

'It would make more sense if the buyer was another bank wanting to form synergy from consolidation.' China Everbright owns 20 per cent of International Bank of Asia and is the majority shareholder of the Arab Banking Corp.

Analysts said it was unlikely China Everbright had the share muscle to convince Arab Banking that the bank was a viable purchase.

Another analyst said China Everbright's mainland management would be reluctant to buy a Hong Kong bank, particularly at this rather nervous stage of the credit cycle.

'FPB is not an attractive buy for a number of factors and particularly since it had to downsize its asset base to sustain itself in the current operating environment,' the analyst said.

Shares of First Pacific gained 2.5 cents to close at $2.55 yesterday, while shares of FPB Bank closed at $1.23.