FSC urged to focus on state-run banks

"The ministry has to hurry up and get rid of government-controlled stakes by releasing appealing targets like First Financial, which has considerable assets and a strong performance, to lure interested private financial holdings, such as Cathay and Fubon ? in a bid to hit their policy target on time," said Chu Yu-chun (朱玉君), a finance sector analyst with SinoPac Securities Corp (建華證券).

The ministry's efforts to boost industry consolidation suffered a setback after Chang Hwa Commercial Bank (彰化銀行) failed to finalize its global depository receipt (GDR) offering, which had been intended to bring in foreign strategic partners. As well, a privatization plan for the Central Trust of China was blocked last month in the legislature amid concerns over protecting its employees.

To expedite privatization in the finance sector, Jesse Wang (王嘉樞), head of research with BNP Paribas Securities Taiwan Co, suggested the ministry sell off its stakes at one time in a grand auction, which would attract both local and foreign investors.

"They all understand that if they miss the chance, they will fall significantly behind in the consolidation game," he said.