Ti said the KGI-Taishin deal was likely to make Yuanta Securities and Fubon Securities more aggressive in looking for potential acquisition targets to increase both business scope and market competitiveness.
“Thus far, both companies have shown restraint in overpaying for deals,” he said.
Another analyst agreed with Ti’s breakdown of the implications for the domestic brokerage industry.
“Consolidation will be an inevitable trend” in the local brokerage sector, Polaris Securities (寶來證券) vice chairman Huang Chi-yuan (黃齊元) said at a seminar in Taipei yesterday.
“Most companies should aim for a 10 percent market share to survive,” Huang said.
At yesterday’s investor conference, Gibb said Taishin Financial was planning to acquire a small securities company before closing the deal with KGI.
This would allow it to carve out the right to operate businesses such as underwriting, securities investment trust and proprietary trading for its current corporate clients, he said.
The company is also evaluating its planned joint venture with Aegon Life Insurance (Taiwan) Inc (全球人壽), which has liquidated its local operations, and plans to finalize a decision in the second half on whether it would pursue the deal or seek other insurance partners, Gibb said.
Taishin Financial posted NT$777 million in after-tax earnings for the first quarter of this year, or NT$0.07 per share, after suffering NT$5.2 billion in losses last year, the company said yesterday.
Looking ahead, Spike Wu (吳清文), general manager of the company’s retail banking group, said Taishin Financial expected to see stable earnings after interest spreads improve with better fee incomes in coming quarters given better investment sentiment and rising turnover from the local stock market.
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