Taiwan Business Bank (臺灣企銀) said yesterday that it plans to introduce a foreign strategic partner by November to take over a stake currently held by Mega Financial Holding Co (兆豐金控), which decided to drop a merger plan with Taiwan Business earlier this year.
"We hope to link Mega Financial's shareholding disposal to our plan to form a partnership with interested overseas investors," Taiwan Business Bank's newly appointed president Jack Huang (黃新吉) told a press conference yesterday.
Huang, who officially took up his presidency yesterday, is the first company employee to be promoted to the position in the state-controlled bank in eight years. He has expertise in overseas banking businesses and formerly headed Taiwan Business' branch in Amsterdam during his 22-year service at the bank.
"We have no plan to transform into a financial holdings firm, as the transformation would not necessarily result in competitiveness," Huang said. "We want to sharpen our competitive edge through a strategic partnership first."
The lender, which is heavily reliant on its corporate banking business, is in preliminary talks with some international investors and hopes to branch out into other areas, such as investment banking or the investment trust and advisory business, via the cooperation, Huang said, but declined to elaborate further.
The lender's 30,000 small and medium enterprise customers, many of whom have operations in China, would be a big attraction to foreign investors and the bank expects to see a result in November, Huang added.
State-controlled Mega Financial said in late 2005 that it planned to buy up to 26 percent of Taiwan Business for NT$10 billion (US$299.67 million), or no more than NT$9 per share, within the following year.
The investment plan was part of the government's second-stage financial reform that set a target of halving the number of state banks to six by the end of 2005, to help consolidate the overcrowded banking sector.
However, Mega Financial said in March that it wanted to call off the plan as the merger would not bring much synergy to the company. The financial group holds a 13.44 percent stake in Taiwan Business, with two seats on the board and one supervisor.
The Financial Supervisory Commission's rules say that financial holding firms that do not proceed with takeover investment plans are required to sell their entire stake in the targeted company within 12 months.
Mega Financial said they would follow the authority's instructions in the matter. The Ministry of Finance is the agency that administers state holdings in financial institutions.
"We have not received any official instructions from the ministry and therefore have no details regarding the share disposal available at the moment," Mega Financial spokesman Simon Dzeng (曾垂紀) said in a telephone interview yesterday.
It would be too much of a rush to complete the sale by the end of this year and a 12-month timeframe is more reasonable, said Dzeng, who is currently on a business trip in Europe.
The company hoped the regulator would confirm its position as soon as possible in order to settle the matter, he said.
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