TAIPEI, Oct 2 (Reuters) Cathay Financial <2882.TW>, Taiwan's top financial holding firm, won an auction for failed bank China United Trust&Investment (CUTIC), the government said on Tuesday, as consolidation of the overcrowded banking sector speeds up.
The government will pay Cathay T$12.9 billion ($397 million) for the company's banking arm to take over some of the small lender's assets, primarily its 20-branch network, a government official said.
Pressure has been rising on foreign and local banks to make acquisitions in Taiwan, Asia's fourth-biggest market, after Citigroup
''The bidding result is a good thing for the banking sector,'' said Lawrence Pan, executive vice president of government-owned Central Deposit Insurance Corp, which oversaw the auction.
Chinatrust Financial <2891.TW>, Taiwan's largest credit card issuer, recently won an auction for failed lender Enterprise Bank of Hualien.
In June, Dutch bank ABN AMRO
The CUTIC auction was completed after the Taipei stock market closed on Tuesday. Cathay shares had risen 5 percent, beating a 1.4 percent gain on the broader TAIEX market <.TWII>.
REUTERS SR HS1548