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Taiwan Cooperative Bank's board backs merger negotiations

Taiwan Cooperative Bank (合作金庫銀行), the nation's second-largest lender by assets, said its board authorized the lender's chairman and president to conduct merger talks with rival financial institutions.

"The authorization doesn't limit targets for talks or create a timetable. The counterparts can be either domestic or foreign," said Chen An-hsiung (陳安雄), executive vice president of Taiwan Cooperative.

The bank's board approved the authorization late Friday, Chen said.

He declined to provide names for any potential counterparts for the merger talks.

Chen said he was aware of a Chinese-language newspaper report yesterday, citing unidentified financial regulators, which said Taiwan Cooperative may acquire Farmers Bank of China (農民銀行) to create a lender with a domestic market share of 10 percent.

"Just like you, I also heard this from the paper. No higher authority has informed me about the plan," Chen said.

Taiwan Cooperative now has a market share of 7 percent in Taiwan, while Farmers Bank has 3 percent, the paper said. Both are state-controlled banks.

Taiwan Cooperative on May 4 said it was in talks to form a strategic alliance with several foreign financial institutions, including France's BNP Paribas SA.

Taiwan Cooperative may sell a stake of less than 20 percent to the foreign partner after forming an alliance, Chen said.

Taiwan Cooperative's ownership passed into private hands on April 4 after its employees bought a 12-percent stake and the government's holding fell to less than 50 percent.
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