US firm's $2.92b buyout marks the first foreign acquisition of a Taiwanese bank Taiwanese regulators have given approval for the first foreign takeover of a local bank. GE Capital of the United States has received approval from the Fair Trade Commission to buy a controlling 33 per cent to 50 per cent stake in Cosmos Bank for as much as NT$12 billion ($2.92 billion). GE Capital is one of the largest issuers of credit cards in the US, while Cosmos is Taiwan's largest issuer of cash cards. Cash cards give holders pre-approved instant personal loan, charging high transaction fees and high interest rates. Cosmos was the first to issue a cash card in Taiwan five years ago, dubbed the George and Mary Card, setting a trend all major banks in Taiwan later followed. Analysts believe Cosmos' George and Mary business is its only operation making a profit. The company has seen profitability decline steadily over the past few years, with return on equity falling from 7.31 per cent in 2002 to just 0.46 per cent last year. The company posted a first-quarter loss of NT$637 million, compared with a profit of NT$591 million for the same period last year. The deteriorating performance has made a capital injection critical for Cosmos in the absence of any sudden turnaround in its fortunes. GE Capital's takeover of Cosmos is unlikely to begin a stampede to buy into Taiwanese banks. 'Cosmos is a very unique situation,' said CLSA banking analyst Bruce Warden. '[GE Capital is] buying the cash card business.' Taipei has already stated its desire for foreign strategic investors to enter the market through mergers and acquisitions. 'It's precedent-setting from a regulatory point of view - it signals an openness on behalf of the government,' Mr Warden said. Citigroup had previously been discussed as a possible suitor for Cosmos. Cosmos officials did not return calls for comment yesterday.