Macoto Bank turns Shin Kong subsidiary in share-swap

" [W]e'll differentiate our operations by providing more tailor-made products ..."

Frank Hung, chairman of Macoto Bank's board

Shin Kong Financial Holding Co (新光金控), which owns Taiwan's second-largest life insurance company, yesterday concluded a share-swap process -- as agreed in April -- to make local lender Macoto Bank (誠泰銀行) its 100-percent owned subsidiary.

On Dec. 31, the bank is slated to merge with the company's Shin Kong Commercial Bank (新光銀行) to form one banking entity, renamed Taiwan Shin Kong Commercial Bank Company Ltd, or Shin Kong Bank in short.

Shin Kong Financial chairman Eugene Wu (吳東進) said that these two banks' integration would generate synergy considering that they share similar operational ideas and corporate cultures, and can complement each other's business operations.

The financial-services provider is expected to raise its financial forecast for the year by 20 percent during a board meeting today.

Company spokesman Victor Hsu (許澎) said the whole-year sales target would jump from the previous goal of NT$6.1 billion (US$183.5 million) to a revised NT$7.35 billion.

After the inclusion of Macoto Bank, Shin Kong Financial would have a paid-in capital of NT$40.7 billion, a market value of NT$110 billion and total assets valued at NT$1.3 trillion. The company will remain the nation's seventh-largest financial-services provider by assets.

Winston Yung (容覺生), deputy chief financial officer of Shin Kong Financial, estimated that the two banks' merger would create a synergy worth NT$1.9 billion annually starting in 2008, as a result of strengthened cross-selling, savings on capital and costs and improving credit-card business, which will boost the productivity of the banking branches.

Macoto Bank yesterday reelected its board, which is comprised of 13 directors and two supervisors with Frank Hung (洪國超) serving as the chairman and president. The board also approved making former chairman Lin Cheng-yi (林誠一) the bank's honorary chairman, in appreciation of his contributions over the years.

"As Taiwan's financial sector has an over-banking problem, we'll differentiate our operations by providing more tailor-made products for customers, launching real-time services and establishing an effective platform to facilitate services," Hung said at a press conference.

Elaborating on the new banking unit's future developments, Shin Kong Bank president Lee Tseng-chang (李增昌) said that Macoto Bank's strength in consumer banking would greatly complement Shin Kong Bank's corporate banking in promoting diversified businesses.