A merger between the Land Bank of Taiwan (土銀) and Central Trust of China (中央信託局) yesterday received final approval from the boards of both state-owned banks, said Land Bank chairman Wei Chi-lin (魏啟林).
"With combined assets of more than NT$2 trillion, both state-owned banks will be incorporated into a new Taiwan Financial Holding Co (台灣金控) -- the second largest financial service company in 2005," Wei said yesterday. The largest financial services company is Cathay Financial Holding Corp (國泰金控).
Wei said that the merger still requires the approval of the Ministry of Finance and a budget review by the Legislative Yuan.
According to Wei, the Taiwan Financial Holding Co would be organized into four subsidiaries: banking, securities, life insurance and trust businesses. The management team would number fewer than 40, including a chairman and a vice chairman.
The finance ministry will be entitled to appoint candidates for the new company's chairmanship and vice chairmanship, he said.
The merger will result in no lay-offs, Wei said, with the new entity absorbing all 5,900 employees from Land Bank and 1,500 from Central Trust.
Vice Finance Minister Susan Chang (
Chang said that in early 2002, the Bank of Taiwan (台銀), Land Bank and Central Trust of China had proposed to co-found a financial holding company, but the plan later failed after an evaluation report questioned the plan's synergy.
Wei said that the new Taiwan Financial Holding Co may seek financial partners in the private sector to expand its financial grip following the government's plan to release its shares in late 2006.
According to Shea Jia-dong (
On Monday, Shea told the local Chinese-language media that he was upbeat about the merger since Central Trust, whose business focus has been trade-oriented, must strike a partnership with large financial institutions to develop its financial businesses.
After the incorporation, Taiwan Financial Holding Co will have NT$1.3 trillion in lending and NT$1.6 trillion in savings.
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