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East West Bank Acquired in Management-Led Buyout

June 16, 1998|EVELYN IRITANI | TIMES STAFF WRITER

Asia's financial crisis left another mark on Southern California on Monday with the sale of San Marino-based East West Bank, the nation's largest Chinese community bank, in a management-led buyout.

Dominic Ng, president and chief operating officer of the commercial bank, said a group of 150 institutional and accredited investors, largely from the United States, have bought out Indonesia's Nursalim family for an undisclosed price.

Ng, one of a half a dozen senior managers involved in the buyout, said the management and personnel as well as the bank's operations will not be affected by the sale. The bank, which has $1.7 billion in assets, reported earnings of $3 million during the quarter ending March 31, up 30% over the previous year.

Ng said uncertainty has dogged the bank since Indonesia's currency, the rupiah, fell 80% and its stock market crashed. That left most Indonesian companies practically bankrupt, particularly those holding dollar-denominated debt.

For the Record
Los Angeles Times Wednesday June 17, 1998 Home Edition Business Part D Page 3 Financial Desk 1 inches; 22 words Type of Material: Correction
East West Bank--Dominic Ng is president and chief executive of San Marino-based East West Bank. He was misidentified in an article that appeared Tuesday.
For the Record
Los Angeles Times Wednesday June 17, 1998 Home Edition Business Part D Page 3 Financial Desk 1 inches; 22 words Type of Material: Correction
East West Bank--Dominic Ng is president and chief executive of San Marino-based East West Bank. He was misidentified in an article that appeared Tuesday.

He declined to give terms of the buyout, but said East West now has "excess cash" to more aggressively pursue expansion of its 22-branch network, including possible acquisitions in California. Later this year, the bank will open a branch in Milpitas, its second location in Silicon Valley.

Within six months, the new owners plan to take the company public.

Southeast Asia's economic problems have not hurt East West's operations because it does not have any direct exposure in those countries, according to Ng. East West's commercial customers are heavily trade-dependent but mostly do business in China, Taiwan and Hong Kong, countries whose economies have been less affected by the turmoil.

But Charlotte Chamberlain, an analyst with Jefferies & Co., a Los Angeles brokerage, predicted East West will face increased pressure to cut costs to boost its numbers before going public.

She said that although East West has a good network in the Chinese community, it has been significantly outperformed by General Bank, another major Southern California bank targeting the same market.

"[East West] is a good-sized Asian community bank but with kind of sub-par performance," she said. "It makes sense that institutional investors would want to buy it as a turn-around."

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