As the government continues to push for financial reform, the nation's biggest state-run bank yesterday said that it will invest in three subsidiaries to facilitate its plan of forming a financial holding company.
"Pending legislative approval, we have proposed allocating a budget which will take up a 45 percent stake in each of the three investments, including a securities subsidiary, a trust subsidiary and an insurance agency subsidiary," Bank of Taiwan (
Lee said that the bank plans to invest NT$1.8 billion in a securities subsidiary, NT$600 million in a trust subsidiary and NT$5 million in an insurance subsidiary while looking for potential investors to take up the remaining 55 percent stake in each of the three subsidiaries.
The bank does not have an exact timetable for when the three new reinvestments will be implemented, as this depends on the legislature's review of its annual budget, Lee said.
He made the announcement yesterday after presiding over Chunghwa Telecom Co's (
The Bank of Taiwan and other state-run banks have come under pressure since President Chen Shui-bian (
Lee and Bank of Taiwan chairman Joseph Lyu (
"I have no idea. I learned of the proposal from the media report," Lyu said, adding that the bank's biggest shareholder, the Ministry of Finance, had issued no such instruction.
The Chinese-language Liberty Times (Taipei Times' sister newspaper) reported on Friday that the Bank of Taiwan will team up with the Land Bank of Taiwan (土地銀行), Taiwan Cooperative Bank (合作金庫) and Central Trust of China (中信局) to expand into a financial holding company to be entitled Taiwan Financial Holding Co (台灣金控).
The paper reported that the holding company will be formed over three years with a total of 473 branches nationwide and NT$6.5 trillion in total assets.
If the merger is carried out successfully, Taiwan Financial Holding Co will take up a 26.3 percent market share, including a 28.2 percent market share in deposits and a 25.3 percent market share in loans, the paper claimed.
The merger plan seems to have been welcomed by the four banks' labor unions. The four unions are slated to petition the Financial Supervisory Commission next Thursday for an endorsement to the merger proposal.