Chang has free reign: Finance Ministry

The Ministry of Finance yesterday formally announced that Michael Chang (張兆順), chairman of state-run Taiwan Business Bank (台灣企銀) will head First Financial Holding Co (第一金控), the nation's fifth-largest financial group by assets.

First Financial, 35 percent controlled by the government, is scheduled to hold a board meeting on Monday to select the new chairman, said Liu Teng-cheng (劉燈城), director general of the ministry's National Treasury Agency.

Liu said Chang will also take over Vice Minister of Finance Gordon Chen's (陳樹) seat on the company's board. Chen has served as First Financial's acting chairman since an extraordinary shareholders' meeting last month.

Taiwan Business Bank's chairmanship will be temporarily filled by the bank's president, Peter Lo (羅澤成), Liu said. If Mega Financial Holding Co (兆豐金控) completes its purchase of Taiwan Business Bank this year, it will appoint a new chairman, the official added.

As the two state banks Chang formally chaired -- Bank of Overseas Chinese (華僑銀行) and Taiwan Business Bank -- were both acquired by bigger players, many suspect that Chang might lead First Financial down the same path as part of the government's financial reforms.

The government downplayed the speculation.

"We respect Chang's decision-making abilities. Whether he continues with the restructuring task launched by his predecessors is up to him," the Finance Ministry's Liu said.

Meanwhile, Liu said that the legislature's decision on Thursday night to slash the NT$40.2 billion (US$1.26 billion) budget earmarked for the release of government shareholdings in five state banks would not affect the second stage of financial reforms.

However, the budget cut will delay the privatization of the Bank of Taiwan (台灣銀行) and Lank Bank of Taiwan (土地銀行), he noted.

The five state banks to be privatized include Taiwan Cooperative Bank (合庫銀行), Chang Hwa Commercial Bank (彰化銀行) and Taiwan Business Bank.