ICBC and Chiao Tong merger to go ahead on Monday

Mega Financial Holding Co (兆豐金控), the nation's third-largest financial group by assets, said yesterday that the merger of its two banking units will go ahead as planned on Monday, despite the fact they are still awaiting the approval of regulators in the US and Hong Kong.

The merger between International Commercial Bank of China (ICBC, 中國國際商銀) and Chiao Tung Bank (交通銀行) into Mega International Commercial Bank Co (兆豐國際商銀) is scheduled to take effect next Monday.

The company has put off the effective date twice: first from March 27 to June 26 and then to Monday.

"We are still waiting for feedback [from regulators in the US and Hong Kong]," Mega Financial's spokesman Joseph Shieh (謝劍平) told the Taipei Times in a telephone interview yesterday.

"But we have no plans to delay the date again," Shieh said.

The merger deal is subject to approval from overseas financial regulators as the two banks already have outlets in those markets.

State-controlled Mega Financial's board also agreed to the appointment of 12 out of 15 new board directors for Mega International yesterday.

According to the Ministry of Finance's blueprint, Mega Financial's president Mckinney Tsai (蔡友才) will take up Mega International's chairmanship, while Chiao Tung's vice president Hsu Kuang-shi (徐光曦) will be appointed Mega International's president.

To express its opposition to the merger, the ICBC staff union said it has bought ads to be published in major newspapers on Monday to voice their protest against the name change, citing the bank's recognized brand name in international financial markets.

Mega Financial's board did not touch on whether it will join Taiwan Business Bank's (TBB, 台灣企銀) NT$10 billion fundraising activity. Mega Financial previously said it was reluctant to step up its shareholding in the lender due to its mounting bad debts.

Mega Financial currently holds a 14.36 stake in TBB. The company said last December that it planned to buy as much as a 26 percent stake within one year.