Fuhwa shareholders approve name change

Shareholders of Fuhwa Financial Holding Co (復華金控) yesterday passed a resolution to change the firm's name to "Yuanta Financial Holding Co" (元大金控), targeting a return on equity (ROE) ratio of 10 percent per year.

The nation's 11th-largest financial group by assets plans to apply to the Financial Supervisory Commission for permission to change its name next Wednesday.

Board members of the holding company were also re-elected yesterday. Of 11 seats on the board, Yuanta Core Pacific Securities Co (元大京華證券), the nation's biggest brokerage, with a 45 percent stake in Fuhwa, secured seven seats.

Central Investment Holding Co (中央投資), which represents the Chinese Nationalist Party (KMT) with a 22 percent shareholding in Fuhwa, took one seat.

The result of the board election was in line with market speculation and shares of Fuhwa closed down 1.32 percent at NT$18.65 on the Taiwan Stock Exchange yesterday.

Former deputy minister of finance Lin Tseng-chi (林增吉), Formosa Plastics Group (台塑集團) business management division president Yang Chao-lin (楊兆麟) and National Chengchi University business administration professor William Seetoo (司徒賢達) were elected as independent directors.

The independent directors will establish an audit committee -- the first time such an arrangement is made for a local financial holding firm -- to strengthen corporate governance.

Yuanta Core Pacific Securities has been working to improve Fuhwa's asset quality and competitiveness since it assumed management of the holding firm in 2005, chairman Yen Ching-chang (顏慶章), who will continue to chair the newly merged entity, said.

Fuhwa's ROE ratio was 0.38 percent in June 2005, the lowest among all 14 financial holding companies in Taiwan, Yen said.

As of last month, the ratio had jumped to 3.3 percent, ranking eighth among rivals, he said, adding that the figure is expected to reach 9.48 percent this year.

"We are now looking at a 10 percent ROE ratio per year," Yen said.

Over the past two years, Fuhwa's assets have increased to NT$570 billion (US$17.3 billion), an increase of 49 percent, Yen said.

Net worth also jumped by 155 percent to NT$104.4 billion, the seventh-highest among financial holding companies, he said.

For the first five months of the year, Fuhwa posted after-tax earnings of NT$2.36 billion, and the earnings will improve over the next six months, Yen said.

Fuhwa incurred a loss of NT$3 billion last year.

Fuhwa merged with Yuanta Core Pacific Securities in April. The merged entity hopes to become one of the nation's top five financial holding firms in terms of earnings within two years, Yuanta chairwoman Judy Tu (杜麗莊) said in March.

Separately, Chang Hwa Commercial Bank (彰化銀行) selected former finance minister Lee Yung-san (李庸三) as chairman, in a bid to help expansion overseas and speed up its merger with Taishin Financial Holding Co (台新金控).

"Lee is a seasoned banker and we believe his authority will help the bank greatly in terms of future expansion," James Shih (施建安), an executive vice president at Chang Hwa, said yesterday.

Lee succeeds Chang Po-shin (張伯欣), who resigned on June 11 after having served seven years as chairman.