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In the wake of news of the merger, Central Trust's employees union has withdrawn from a meeting with workers at the International Commerce Bank of China (ICBC, 中國國際商銀) and First Financial Holding Co (第一金控) to vote on strikes today.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.
Greek tourism student Katerina quit within a month of starting work at a five-star hotel in Halkidiki, one of the country’s top destinations, because she said conditions were so dire. Beyond the bad pay, the 22-year-old said that her working and living conditions were “miserable and unacceptable.” Millions holiday in Greece every year, but its vital tourism industry is finding it harder and harder to recruit Greeks to look after them. “I was asked to work in any department of the hotel where there was a need, from service to cleaning,” said Katerina, a tourism and marketing student, who would
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