Despite the setback in securing a buyer for the state-controlled Taiwan Business Bank (
"I cannot say this case will not deal a blow to financial reform, but we cannot become depressed. Instead, we must review any possible flaws to fine-tune the way we push the reform," he said on Wednesday night after announcing that Taiwan Business Bank's share-sale had failed.
The minister said the sale had failed because the bank's labor union and the interested buyer could not reach an agreement on employee benefits.
Facing a room packed with reporters, Lin denied that the government had been rushing to push state-run banks' mergers with bigger players in the hope that this would stimulate private, family-owned banking institutions to seek merger targets and boost the financial sector's competitiveness.
State-run banks have a 55 percent share of the market by assets, and 50 percent by revenues, he said, adding that the government must withdraw from these businesses to facilitate fair competition and internationalization.
This year, the government has disposed of the poorly performing Bank of Overseas Chinese (
Answering questions as to why the finance ministry would rush to sell Taiwan Business Bank, Lin said that the lender, despite having an advantage in retail channels, has actually lost an average of NT$1.6 per share over the past four years.
"The bank only made money in one of the past four years if we look at after-tax profits. In one year, it was even more than NT$10 billion [US$305 million] in the red," he said, adding that it is urgent to boost the small lender's quality and strengthen its operations by pushing for a merger.
He said that although Taiwan Business Bank is known for its expertise in granting loans to small- and medium-sized enterprises (SMEs), its market share in this niche is only 12 percent.
"As any lender can develop this business, Taiwan Business Bank's merger will not affect the ability of SMEs to obtain loans," Lin said.
The minister declined to name the bank's union as a major reason for the bid's failure, despite concern that the union's strong opposition to the privatization scheme may create a domino effect among other lenders.
Taiwan Transport and Storage Corp (TTS, 台灣通運倉儲) yesterday unveiled its first electric tractor unit — manufactured by Volvo Trucks — in a ceremony in Taipei, and said the unit would soon be used to transport cement produced by Taiwan Cement Corp (TCC, 台灣水泥). Both TTS and TCC belong to TCC International Holdings Ltd (台泥國際集團). With the electric tractor unit, the Taipei-based cement firm would become the first in Taiwan to use electric vehicles to transport construction materials. TTS chairman Koo Kung-yi (辜公怡), Volvo Trucks vice president of sales and marketing Johan Selven, TCC president Roman Cheng (程耀輝) and Taikoo Motors Group
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