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Taiwan Cooperative says pact with BNP still intact

The new head of the state-run Taiwan Cooperative Bank (合作金庫銀行) and the Ministry of Finance yesterday said that the bank's strategic alliance with BNP Paribas would remain intact following a management reshuffle.

"The partnership with BNP Paribas is mutually beneficial," said Hsu Teh-nan (許德南), the new chairman of the nation's second-biggest lender.

Taiwan Cooperative can obtain know-how on insurance and wealth management through the deal, while BNP Paribas can take advantage of the local bank's branch network -- the biggest in Taiwan -- to market its products, Hsu said.

It inked last month an agreement with BNP Paribas to form an asset management joint venture by the end of the first quarter.

If the tie-up goes well and BNP Paribas wants to make an equity investment in the lender, then "why not?" Hsu asked.

But this will require an open and transparent process, like public placement or a shares auction and a ceiling on holdings, he said, "for we will not give the bank away."

Hsu, 63, took the helm of Taiwan Cooperative yesterday, replacing Sean Chen (陳沖), whose removal was rumored to have been partly the result of his persistence in forming partnership with the French firm. But Vice Minister of Finance Liu Teng-cheng (劉燈城) said yesterday that the government would uphold the tie-up.

Hsu said the bank also aimed to develop into a financial holding firm. He did not give a clear time frame.

Taiwan Cooperative posted un-audited net profits of NT$9.07 billion (US$280 million) last year, compared with NT$2.63 billion in 2005.
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