The Ministry of Finance yesterday said that it was looking forward to further consolidation among the nation's 14 newly established financial holding companies.
"In accordance with the market mechanism, [the ministry] encourages [a second wave of] merger and acquisition [M&A] activities among financial holding companies to further beef up the banking sector's competitiveness," Minister of Finance Lin Chuan (林全) told the legislature's finance committee.
Lin told lawmakers that the nation still had too many banks and that none of the subsidiary banking units of the nation's 14 financial holding companies had a market share above 10 percent.
Moreover, the three biggest banks -- the Bank of Taiwan (
Therefore, the local banking sector should continue to consolidate, Lin said, noting that the ministry will also allow government-controlled financial holding companies to approach suitable partners, "regardless of whether they are acquirers or being acquired."
Legislators yesterday grilled top management of the nation's financial holding companies regarding the makeup of boards and internal decision-making processes.
But the focus was on plans for state-controlled First Financial Holding Co (第一金控), in which the ministry owns a 26.15 percent stake.
In response to DPP Legislator Lin Wen-lang's (
Legislators also asked the ministry to report about First Financial's previous controversial sale of shares in the form of global depository receipts.
The committee requested that the report, to be prepared by the ministry within seven days, should detail the sale's procedures, including a list of buyers and their business background, an inventory of the bank's non-performing loans and their collateral.
Separately, KMT Legislator Huang Chien-ting (黃健庭) grilled Lin over the performance of state-owned banks, including the Bank of Taiwan, Taiwan Cooperative Bank, the Land Bank of Taiwan and the Central Trust of China (中央信託局).
Huang complained that the ministry had over-emphasized the progress of consolidation of state-controlled financial holding companies while neglecting to monitor the deterioration of state-owned banks.
He said that the four banks' revenues had declined by 30 percent to 40 percent over the past few years. Budgeted revenues of the Bank of Taiwan dropped from NT$128.6 billion in 2000 to NT$119.5 billion last year while those of Taiwan Cooperative Bank declined from NT$101 billion in 2000 to NT$68.9 billion last year, according to Huang.
But Lin shrugged off Huang's criticism, arguing that declining interest rates in the past few years were behind the fall in revenues at state-owned banks.
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