Chinatrust Financial Holding Co. (2891.TW) is capable of acquiring and integrating American International Group Inc.'s (AIG) Taiwan unit, Chinatrust Chief Investment Officer Daniel IK Wu said Tuesday.

Chinatrust Financial is among the companies in the race to buy AIG's Nan Shan Life Insurance Co., Taiwan's second-largest life insurer by gross premiums after Cathay Life Insurance, in a deal that will likely fetch US$2 billion, people familiar with the matter have said.

Wu made the comment on Nan Shan at a news conference when asked by Dow Jones Newswires if the company could integrate a company as large as the AIG unit. He declined to elaborate.

Taipei-based Chinatrust, Taiwan's largest credit card issuer, has around NT$1.73 trillion worth of assets, just slightly more than Nan Shan's NT$1.5 trillion.

James Wu, a BNP Paribas based in Taipei, downgraded Chinatrust to reduce from hold Monday, and lowered the company's share price target to NT$15.90 from NT$18.40, saying Nan Shan is too big for Chinatrust to manage.

"Chinatrust's management has limited hands-on experience of insurers," Wu said in a report. "A small-scale insurer might compliment the Chinatrust platform, but (Nan Shan) is too big for the purpose."

Interested buyers are doing due diligence on Nan Shan before they put in bids at the end of August, according to people with knowledge of the matter. Bain Capital LLC, Oaktree Capital Management LLC and Morgan Stanley's private-equity unit are in talks with Chinatrust Financial on bidding for Nan Shan, other people with knowledge of the matter said late July.

Wu also told reporters the company is looking beyond Asia for expansion. In late June, Chinatrust Financial appointed Michael B. DeNoma, a former group executive director of Standard Chartered PLC, as the chairman of its Chinatrust Commercial Bank Co. in a bid to expand overseas.

"Standard Chartered's expansion in the past few years was amazing, and we would like to duplicate that...through a three- to five-year development plan," Wu said.

-By Perris Lee Choon Siong, Dow Jones Newswires; +8862-2502-2557; perris.lee@dowjones.com