State-run Bank of Taiwan (台灣銀行), the nation's largest lender, said yesterday that it would swap one of its own shares for every two shares of state-owned Central Trust of China (中央信託局) when the two banks merge.
Bank of Taiwan will issue 500 million new shares for the merger, which was announced in November last year, it said in a filing to the Taiwan Stock Exchange yesterday.
The merger is scheduled for July 1 next year, the statement read.
Bank of Taiwan will acquire Central Trust of China to create the nation's largest financial group, under a government plan to make lenders more competitive.
The merger will form a group that controls 11.6 percent of the market, according to the Ministry of Finance.
Meanwhile, Standard & Poor's (S&P) Ratings Services yesterday reaffirmed its "A+" long-term and "A-1" short-term counterparty credit ratings on Bank of Taiwan with a stable outlook.
"The ratings reflect the bank's strong franchise and market position, satisfactory asset quality, high liquidity and sound capitalization," S&P's credit analyst Susan Chu (朱素徵) said.
"Additional positive rating factors include the bank's systemic importance to Taiwan's financial services industry, administrative functions it carries out on behalf of the government, and its 100 percent ownership by the government," Chu said.