TAIPEI, Dec 14: HSBC Holdings said on Friday it will acquire The Chinese Bank in Taiwan after winning a government auction here, substantially boosting its operations on the island.

After the acquisition, the number of HSBC branches in Taiwan will increase to 47 from eight with a presence in all major cities, HSBC said in a statement.

The government’s Central Deposit Insurance Corporation (CDIC) took control of The Chinese Bank in January 2007 after a massive run caused by deteriorating financial conditions at its parent Rebar group.

Under the agreement, HSBC will assume The Chinese Bank’s assets, liabilities and operations and accept an undisclosed payment from the CDIC.

As at September 30, 2007, gross assets of The Chinese Bank totalled T$100.16 billion.

HSBC said it would provide additional capital of between 300 million and 400 million US dollars to ensure enlarged operations in Taiwan maintain appropriate financial ratios.—AFP