Magazine article American Banker

1st Hawaiian to Buy Union Branches in Guam, Saipan

Magazine article American Banker

1st Hawaiian to Buy Union Branches in Guam, Saipan

Article excerpt

Union Bank of California said late Thursday that it had agreed to sell its three branches in Guam and Saipan to First Hawaiian Bank.

The deal is part of a restructuring Union Bank unveiled last fall to emphasize faster-growing markets and businesses, a company spokesman said. The price for the three branches, which have deposits of $200 million, was not disclosed.

Analysts said they were not surprised by UnionBanCal's decision to sell the branches to the BankWest Corp. subsidiary, given the seller's modest presence in those areas and its U.S. mainland-centric strategy. "Financially and operationally, the sale is immaterial," said Campbell Chaney, an analyst with Tucker Anthony Sutro Capital Markets. "What it shows is that the company is looking deep" to wring out all inefficiencies, he said.

Bank of Tokyo-Mitsubishi owns 64% of UnionBanCal Corp., which runs Union Bank. The Japanese banking giant recently completed a merger with two other Japanese banks. Speculation that it might sell its stake in UnionBanCal has surfaced from time to time, particularly as the Japanese economy has weakened.

Rosalind Looby, an analyst at Credit Suisse First Boston, said she believes Tokyo-Mitsubishi is trying to raise cash. She said she doesn't think a sale of UnionBanCal is going to happen soon, but the behavior of its stock price reflects "a perception in the market that a takeover is likely."

Perhaps fueling those rumors is UnionBanCal's announcement early last week that Takahiro Moriguchi, its chief executive officer since 1997, would return to Bank of Tokyo-Mitsubishi's headquarters to take an unspecified assignment. He is to be succeeded as CEO by Norimichi Kanari, a vice chairman of Bank of Tokyo-Mitsubishi.

The moves cap months of turmoil at a company that has struggled to overcome declining profits and problems with asset quality. …

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