The legislature yesterday gave a preliminary green light to the Ministry of Finance's proposal to sell shares of Chang Hwa Commer-cial Bank (彰化銀行) to foreign investors through issuing global depositary receipts (GDRs).
Should the share sale go smoothly, the firm will be the first state-run bank to transfers its ownership to overseas investors.
While fielding questions yesterday at the legislature's Finance Committee, Minister of Finance Lin Chuan (
As the bank also has a separate plan to sell another 1.4 billion shares to raise capital, Lin said those shares would go to the same foreign investor that buys the government's shares, to ensure the investor remains the controlling shareholder in the bank.
Foreign ownership of the bank could make it a more attractive investment.
"I believe overseas investors would be more interested in investing in the bank, taking into consideration that a foreign financial institution served as a major player on the lender's board," Lin said.
Lin said last month at an economic forum that foreign investors would take up ownership of 30 percent or more of the state-run bank. But yesterday he said the ratio of foreign ownership may reach as high as 40 percent, to become the bank's single largest shareholder.
Previously, the ministry said that at least three foreign institutions have expressed interest in acquiring a stake in Chang Hwa, with ING Groep NV, the biggest Dutch financial services company, being the most active bidder.
Lin refused to reveal if ING will be the bank's new boss.
The Dutch company currently has fund management and insurance joint ventures with Chang Hwa and has been in talks to acquire a stake in the bank since 2001.
After the sale of both the government's stake and the bank's new share issuance, the ministry will set an initial three-year embargo on the sale of the total 2.825 billion shares, said Chou Hsien-yang (
Wang Chien-ming (
As the nation's third largest commercial bank, Chang Hwa has 169 branches and about 5 million customers nationwide.
The bank reported pre-tax income of NT$148 million and earnings per share of NT$0.25 for the first 11 months of last year.