With only limited possibilities for synergy, the proposed merger of the Bank of Taiwan (
"They want to merge just for the sake of merging. It makes no sense theoretically," said Thomas Lee (
The Ministry of Finance announced on Thursday night that the Cabinet has approved the integration of these two 100-percent state-owned banks. The Bank of Taiwan will be the surviving entity, remaining the nation's largest bank, with combined assets of about NT$3 trillion (US$90 billion).
The two banks' directors approved the merger at their respective board meetings yesterday afternoon.
The planned merger will give the Bank of Taiwan a market share of 11.59 percent, compared with the 9.77 percent share Taiwan Cooperative Bank (
Lee said the latest merger would not be able to reduce operational costs, as the Bank of Taiwan has already achieved an economic scale.
Standard & Poor's Ratings Services kept its ratings on the Bank of Taiwan unchanged, with a long-term rating of "A+" and a short-term rating of "A-1," according to a report issued yesterday.
"Although Central Trust's financial profile is weaker than that of Bank of Taiwan, any merger is unlikely to have a significant negative impact on Bank of Taiwan's financial profile, as Central Trust is comparatively small," the report said.
Taiwan Ratings Corp (
Explaining the details in a press conference yesterday afternoon, Minister of Finance Lin Chuan (林全) said the government has no choice but to choose the second-best option after Central Trust employees and the legislature's Finance Committee strongly opposed the original separate-sale scheme to auction off Central Trust's banking and insurance units.
"Central Trust's case cannot be delayed infinitely, as employee morale is eroded and business expansion has stagnated," Lin said.
In the wake of news of the merger, Central Trust's employees union has withdrawn from a meeting with workers at the International Commerce Bank of China (ICBC, 中國國際商銀) and First Financial Holding Co (第一金控) to vote on strikes today.
Bank of Taiwan chairman Joseph Lyu (
However, their arguments failed to convince analysts, who prefer integrations between private banks and state-controlled players to maximize operational efficiency.
Wang Chien-ming (
As the government now needs to dispose of one more state-controlled financial institution before the end of the year in accordance with its consolidation goals, Lin remained close-lipped as to which bank or financial holding company will be next.
"We do not rule out any possibility as long as the most synergy can be created," he said.
DECOUPLING? In a sign of deeper US-China technology decoupling, Apple has held initial talks about using Baidu’s generative AI technology in its iPhones, the Wall Street Journal said China has introduced guidelines to phase out US microprocessors from Intel Corp and Advanced Micro Devices Inc (AMD) from government PCs and servers, the Financial Times reported yesterday. The procurement guidance also seeks to sideline Microsoft Corp’s Windows operating system and foreign-made database software in favor of domestic options, the report said. Chinese officials have begun following the guidelines, which were unveiled in December last year, the report said. They order government agencies above the township level to include criteria requiring “safe and reliable” processors and operating systems when making purchases, the newspaper said. The US has been aiming to boost domestic semiconductor
Nvidia Corp earned its US$2.2 trillion market cap by producing artificial intelligence (AI) chips that have become the lifeblood powering the new era of generative AI developers from start-ups to Microsoft Corp, OpenAI and Google parent Alphabet Inc. Almost as important to its hardware is the company’s nearly 20 years’ worth of computer code, which helps make competition with the company nearly impossible. More than 4 million global developers rely on Nvidia’s CUDA software platform to build AI and other apps. Now a coalition of tech companies that includes Qualcomm Inc, Google and Intel Corp plans to loosen Nvidia’s chokehold by going
ENERGY IMPACT: The electricity rate hike is expected to add about NT$4 billion to TSMC’s electricity bill a year and cut its annual earnings per share by about NT$0.154 Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) has left its long-term gross margin target unchanged despite the government deciding on Friday to raise electricity rates. One of the heaviest power consuming manufacturers in Taiwan, TSMC said it always respects the government’s energy policy and would continue to operate its fabs by making efforts in energy conservation. The chipmaker said it has left a long-term goal of more than 53 percent in gross margin unchanged. The Ministry of Economic Affairs concluded a power rate evaluation meeting on Friday, announcing electricity tariffs would go up by 11 percent on average to about NT$3.4518 per kilowatt-hour (kWh)
OPENING ADDRESS: The CEO is to give a speech on the future of high-performance computing and artificial intelligence at the trade show’s opening on June 3, TAITRA said Advanced Micro Devices Inc (AMD) chairperson and chief executive officer Lisa Su (蘇姿丰) is to deliver the opening keynote speech at Computex Taipei this year, the event’s organizer said in a statement yesterday. Su is to give a speech on the future of high-performance computing (HPC) in the artificial intelligence (AI) era to open Computex, one of the world’s largest computer and technology trade events, at 9:30am on June 3, the Taiwan External Trade Development Council (TAITRA) said. Su is to explore how AMD and the company’s strategic technology partners are pushing the limits of AI and HPC, from data centers to