Scotia Bank Bolting From Malaysia

Taiwan’s Cathay Financial Holding Co is in exclusive talks to acquire the Malaysian unit of Canada’s Bank of Nova Scotia, in a deal that could be valued at around US$200mil to US$300mil.

The Taiwanese group’s bank and life insurance units plan to jointly purchase all of Bank of Nova Scotia Berhad in Malaysia, according to a Cathay Financial statement to the Taiwan Stock Exchange on Thursday.

An official in the media office for Cathay Financial told Reuters the Malaysian banking unit is estimated to have a net value of around US$200mil to US$300mil.

Cathay Financial already has around a quarter stake each in Bank Mayapada in Indonesia and the Philippines’ Rizal Commercial Banking Corp (RCBC).

Its latest interest comes as Taiwan’s government has been encouraging more investment into Southeast Asia, with Taiwanese financial conglomerates seeking to diversify revenue for their competitive home market.

Earlier this week, Taiwan’s financial regulator gave its green light for Cathay rival CTBC Financial Holding Co to buy a 35.6 percent stake in Thailand’s LH Financial Group  for 16.6 billion baht ($470.12 million), in a deal first announced last year.

For Bank of Nova Scotia, the move to sell its Malaysian unit comes as the Canadian lender has been revamping its Asian strategy, including announcing last year it was pulling out of Taiwan.