(Adds details of Chinfon's auction, finances; comments from other companies on whether they will bid.)
By Perris Lee Choon Siong
Of DOW JONES NEWSWIRES
TAIPEI -(Dow Jones)- Far Eastern International Bank (2845.TW) is evaluating whether to bid for the credit-card and bank operations of failed lender Chinfon Commercial Bank, which the Taiwan government is planning to auction late October, a Far Eastern executive said Wednesday.
Far Eastern has completed due diligence on the possible bid, the executive added.
"If we do bid, it is because of the potential strategic synergies for our credit card and bank operations," the executive told Dow Jones Newswires on condition of anonymity.
The government-owned Central Deposit Insurance Corp. is scheduled to auction Chinfon's domestic banking and credit-card operations as well as its two Vietnam branches on Oct. 27.
The Taiwan government took over Chinfon, which has 33 outlets in Taiwan and two in Vietnam, in September 2008 because the lender had more debt than assets and had failed to raise fresh capital. The government received no bids for the bank in an auction held in March, and talks in June with wholly state-owned Bank of Taiwan to take over Chinfon also failed.
On Wednesday, a report in the Economic Daily News cited unnamed sources as saying EnTie Commercial Bank (2849.TW), Standard Chartered PLC (STAN.LN), Waterland Financial Holdings Co. (2889.TW), and Taipei-based unlisted Shanghai Commercial & Savings Bank Ltd. had completed due diligence on Chinfon for the Oct. 27 auction.
A personal familiar with EnTie, who asked not to be named, told Dow Jones Newswires the bank isn't likely to put in a final bid as Chinfon's asset quality was worse than expected.
At the end of August, Chinfon had a negative net worth of NT$19.0 billion, and a nonperforming loan ratio of 14.78% - the highest of all Taiwan's banks, according to data on the Financial Supervisory Commission's Web site.
Waterland spokesman Norman Tsai said his company had decided not to bid for Chinfon after conducting due diligence.
Standard Chartered officials declined to comment. Shanghai Commercial officials weren't immediately available for comment.
-By Perris Lee Choon Siong, Dow Jones Newswires; +8862-2502-2557; perris.lee@dowjones.com