Bowa won't merge with Waterland, Nice Group says

Nice Group (耐斯) president Chen Jer-fang (陳哲芳) reiterated yesterday that the conglomerate would not have its banking arm, Bowa Bank (寶華銀行), in which it holds a stake of nearly 40 percent, merged into Waterland Financial Holding Co (國票金控) for at least the next three years.

The Nice Group gained control of five of the 11 seats on Waterland's board on June 29 after months of intense competition with board member Hung San-hsiung (洪三雄), who serves as chairman of Taiwan Financial Asset Services Corp (台灣金服公司).

"We will not let Bowa be incorporated into Waterland Financial for the next three years," Chen told reporters at the inauguration of the bank's new headquarters yesterday.

Bowa will endeavor to improve its financial condition in the next three years so that it will have more bargaining chips in either acquiring or being merged with other financial institutions, Chen said.

He said that the group would nominate Bowa's chairman Victor Liu (劉維琪) to head Waterland Financial, and Chang Hwa Commercial Bank (彰化銀行) managing director Chen Ming-jen (陳明仁) to take up the presidency of the financial service provider.

Waterland is slated to hold a board meeting next Tuesday to decide on the appointments.

Chen was confident that the Ministry of Finance, which holds two seats on the board, would support the proposed personnel layout, saying that Nice, which gained the majority at the expense of a NT$3 billion (US$93.4 million) investment, fully met the ministry's shareholding requirements for board members.

In response, Minister of Finance Lin Chuan (林全) said that the ministry would not dominate the personnel appointments of private financial institutions, unless board members fail to reach consensus on the nominations.

The bad-loan-ridden Bowa expects its non-performing loan ratio, including debts under observation, to plunge to 6 percent from 22 percent after completing the dumping of NT$30 billion worth of bad assets and raising NT$5.3 billion from a joint venture formed by Nice and GMAC Commercial Mortgage (GMACCM), Bowa's second-largest shareholder, the bank said.

Nice and GMACCM's shareholding in the bank increased to nearly 40 percent and over 30 percent respectively, from 20 percent and 15 percent previously, after the fundraising venture, Chen said.