The Ministry of Finance will be the major mover behind the Financial Supervisory Commission's plan for the banking sector's consolidation, commission Chairman Kong Jaw-sheng (龔照勝) said yesterday.
On Tuesday, the commission announced its criteria for financial holding companies mergers as part of its efforts to create fewer but bigger financial-service companies.
"Government-owned shares [under the ministry's management] will be the best tool to motivate the financial-service sector's further consolidation," Kong said.
Government-run financial holding companies will soon consider working as a catalyst to induce the sector's mergers and acquisitions (M&As), he said.
President Chen Shui-bian (陳水扁) said in October that he wanted to slash the number of financial holding companies by half from the current 14 by 2006.
Kong said he had called Minis-ter of Finance Lin Chuan (林全) on Tuesday regarding the commis-sion's plan and will later submit the plan to the Cabinet.
While it is up to the Cabinet and the ministry's discretion to carry out the proposal, Kong said the commission will help hammer out concrete measures and incentives to strengthen the consolidation plan, which aims to create one or two leading domestic players in the financial-service sector -- or what the commission called "national champion" banks -- within the next two years.
"Our next-step goal is to create `regional champion' banks within the next three to five years since Taiwan is well positioned to be the region's financial hub, with its advantages as a manufacturing-based economy," Kong said.
On the local bourse, financial shares led gainers yesterday as investors appeared upbeat about the commission's efforts to encourage consolidation.
Mega Financial Holding Co (兆豐金控) gained 0.5 percent to NT$21.40, while First Financial Holding Co (第一金控) rose 0.4 percent to NT$27.50.
The private sector also res-ponded positively to the commission's plan, although many people feel more concrete supportive measures are necessary to make it work.
"I think the government instigated plan is necessary and feasible since the private sector lacks the incentive to consolidate further," Mega Financial's executive vice president Joseph Shieh (謝劍平) said in a telephone interview.
Mega Financial has been mentioned many times as the best catalyst for M&As.
"Mega Financial's sizable assets allow it to seek merger partners since the sector's further consolidation is inevitable," Shieh said.
He added, however, that "it is unlikely that Mega Financial will be merged with other rivals."
Thomas Wu (吳東亮), chairman of Taishin Financial Holding Co (台新金控), also gave a thumbs-up response to the commission's plan.
"Now that the government has laid down a clear direction, the private sector will understand what to do," he said.
Two government-run financial holding companies -- First Financial and Hua Nan Financial Holding Co (
First Financial executive vice president Huang Hsien-chuang (黃獻全) said his company is "still evaluating the possibility of conducting M&As although no targets have been selected."
First Financial has placed its priority on a corporate streamlining plan to beef up its competitiveness, he said.
Hua Nan Financial has previously expressed interest in merging with First Financial, but was rebuffed on the grounds that the two companies have similar client bases.
SETBACK: Apple’s India iPhone push has been disrupted after Foxconn recalled hundreds of Chinese engineers, amid Beijing’s attempts to curb tech transfers Apple Inc assembly partner Hon Hai Precision Industry Co (鴻海精密), also known internationally as Foxconn Technology Group (富士康科技集團), has recalled about 300 Chinese engineers from a factory in India, the latest setback for the iPhone maker’s push to rapidly expand in the country. The extraction of Chinese workers from the factory of Yuzhan Technology (India) Private Ltd, a Hon Hai component unit, in southern Tamil Nadu state, is the second such move in a few months. The company has started flying in Taiwanese engineers to replace staff leaving, people familiar with the matter said, asking not to be named, as the
The prices of gasoline and diesel at domestic fuel stations are to rise NT$0.1 and NT$0.4 per liter this week respectively, after international crude oil prices rose last week, CPC Corp, Taiwan (台灣中油) and Formosa Petrochemical Corp (台塑石化) announced yesterday. Effective today, gasoline prices at CPC and Formosa stations are to rise to NT$27.3, NT$28.8 and NT$30.8 per liter for 92, 95 and 98-octane unleaded gasoline respectively, the companies said in separate statements. The price of premium diesel is to rise to NT$26.2 per liter at CPC stations and NT$26 at Formosa pumps, they said. The announcements came after international crude oil prices
DOLLAR SIGNS: The central bank rejected claims that the NT dollar had appreciated 10 percentage points more than the yen or the won against the greenback The New Taiwan dollar yesterday fell for a sixth day to its weakest level in three months, driven by equity-related outflows and reactions to an economics official’s exchange rate remarks. The NT dollar slid NT$0.197, or 0.65 percent, to close at NT$30.505 per US dollar, central bank data showed. The local currency has depreciated 1.97 percent so far this month, ranking as the weakest performer among Asian currencies. Dealers attributed the retreat to foreign investors wiring capital gains and dividends abroad after taking profit in local shares. They also pointed to reports that Washington might consider taking equity stakes in chipmakers, including Taiwan Semiconductor
STABLE DEMAND: Delta supplies US clients in the aerospace, defense and machinery segments, and expects second-half sales to be similar to the first half Delta Electronics Inc (台達電) expects its US automation business to remain steady in the second half, with no signs of weakening client demand. With demand from US clients remaining solid, its performance in the second half is expected to be similar to that of the first half, Andy Liu (劉佳容), general manager of the company’s industrial automation business group, said on the sidelines of the Taiwan Automation Intelligence and Robot Show in Taipei on Wednesday. The company earlier reported that revenue from its automation business grew 7 percent year-on-year to NT$27.22 billion (US$889.98 million) in the first half, accounting for 11 percent