Taiwan Business Bank sale nixed

Michael Chang (張兆順), former vice president of Polaris Financial Group (寶來集團), yesterday officially took the helm of the dispute-ridden Taiwan Business Bank (台灣企銀), and reassured employees that he will not sell the state bank during his tenure.

"I am here to revamp the bank, not to sell the bank," Chang said at the handover and inauguration ceremony yesterday. "I have communicated this to the bank's union to make my stance known."

Chang, 57, said he will neither lay off employees nor sell the bank directly, or indirectly.

No sale planned

"Mergers are not my area of expertise," he said, adding that Minister of Finance Lin Chuan (林全) had agreed not to ask him to push the share-sale when he made the appointment.

Chang took up his position at Polaris Financial Group late last month after leaving as chair at the Bank of Overseas Chinese (華僑銀行). At Taiwan Business Bank he is taking a position left vacant by Herbert Chung (鍾甦生), who resigned last week to take responsibility for the bank's failed share sale.

The government, which has a 41 percent stake in the bank, last month attempted to auction off its shares as a part of a plan to consolidate Taiwan's crowded banking sector.

The government plans to halve the number of state-owned banks to six by the end of this year.

But the share sale prompted strong opposition from the bank's union, which staged a four-day strike, said to be the first industrial action in the nation's finance sector, which reportedly scared away the most likely buyer, E.Sun Financial Holding Co (玉山金控).

Chang, a banker who is a certified public accountant, was praised by the Ministry of Finance for his success in revitalizing the then debt-ridden Bank of Overseas Chinese (華僑銀行) through a series of recapitalization and restructuring measures during his 408-day chairmanship. The bank had NT$18 billion in bad debts.

Chang's appointment sparked market speculation that he might attempt to continue the sale of the bank by introducing new shareholders through a recapitalization approach, but he denied this yesterday.

Bad loans

He said his priority is to improve the bank's assets quality and tackle its bad-loan problem.

"The method that worked well at the Bank of Overseas Chinese will not necessarily suit the Taiwan Business Bank," he said.

If the bank really needs recapitalization, the scale will be small, in light of the bank's abundant paid-in capital of NT$42.8 billion, compared with the then ailing Bank of Overseas Chinese's NT$11.8 billion, he added.

Therefore, this would not cause a shift in the bank's management but, at most, would lead to one position on the bank's 15-seat board being given away, Chang said.

In response, Lin Wan-fu (林萬福), chairman of the Taiwan Business Bank Industrial Union, said that the union would closely monitor the new executive to see if he would put his promises into action.

"The union will call a strike again if the sale resumes," Lin said.

Looking forward, Chang said he hoped the bank would become more innovative and design novel and differentiated financial products like bank insurance and securitization products.

"We may look for partnership with overseas financial institutions for this purpose," Chang said, "but we do not have any specific objects for the moment."

The bank's shares yesterday closed unchanged at NT$8.82 on the Taiwan Stock Exchange.