Bank staff urge FSC to guard rights

Nearly 100 employees of Bank SinoPac (建華銀行) gathered outside the Financial Supervisory Commission yesterday, demanding that it safeguard their labor rights in light of a proposed merger.

After chanting slogans outside the building, about 10 representatives of the bank's industrial union met with Gary Tseng (曾國烈), director general of the commission's Banking Bureau, and handed over statements.

The bank operates under SinoPac Financial Holdings Co (建華金控), which is the nation's ninth-largest financial services provider by assets.

The union has complained about SinoPac Financial's refusal to ink an employee protection agreement ahead of a planned merger with another banking entity that belongs to SinoPac Financial, the International Bank of Taipei (IBT, 台北商銀), by year's end.

Paul Lo (盧正昕), CEO of SinoPac Financial, finally agreed on Tuesday night that both banks' employees could enjoy the same preferential retirement programs, among others, and that details would be hammered out by mid-September, said Jerry Huang (黃忠誠), who represents Bank SinoPac's labor union.

"Management's attitude has improved a lot and we'll work to ensure that the two banks' employees will be treated equally," he said.

SinoPac Financial is scheduled to hold a board meeting tomorrow and submit the merger application.

If labor protections stated in the application fall short of what management has promised, the union will boycott the merger, Huang added.

Bank SinoPac's labor and capital disputes are the latest incident to surface since the government launched a second stage of financial reform to consolidate the overcrowded banking sector.

The plan to halve the number of state-run banks to six last year was carried out despite fierce criticism. A goal to reduce the number of financial holding firms from 14 to seven by the year's end has been put on hold.

Moreover, new financial holding firms might be set up next year, further intensifying competition and creating a crowding-out effect, according to a consensus reached by a financial panel on Tuesday.

The panel, held in preparation for next week's Conference on Sustaining Taiwan's Economic Development, agreed that the door should be re-opened for financial institutions interested in becoming financial holding firms.

But opinions varied on the minimum capitalization applicants should have to be qualified.

Lu Daung-yen (呂東英), the commission's acting chairman, proposed that the threshold be set at NT$30 billion (US$912 million) in capitalization, higher than the NT$20 billion requirement set when licenses were granted three to four years ago.

The panel also agreed that banking institutions should be allowed to apply to establish new branches starting next year.

However, the banking sector's hopes regarding expansion across the Taiwan Strait were dashed.

The panel on Tuesday concluded that financial institutions' plans to set up branches in China or invest in Chinese banks would only be workable after the two governments conduct reciprocal negotiations.