Wed, Jul 01, 2009 - Page 12 News List

Proposed sale of Chinfon to Bank of Taiwan called off

By Crystal Hsu  /  STAFF REPORTER

The sale of Chinfon Commercial Bank’s (慶豐銀行) assets, liabilities and its operations — the so-called “good bank” part of the debt-ridden lender — was aborted yesterday because of differences over their value, the Central Deposit Insurance Corp (CDIC, 中央存保) said.

The CDIC refused to provide details about the failed transaction, except to say that it could not cut a deal with state-run Bank of Taiwan (臺灣銀行) over the amount of the subsidy Bank of Taiwan was requesting from the state-run financial restructuring fund.

Chinfon is the only remaining troubled bank under the CDIC’s control. The CDIC took control of Chinfon in September last year.

Local media speculated that the Bank of Taiwan were probably asking for a subsidy of between NT$30 billion (US$914 million) and NT$40 billion, in light of Chinfon’s approximate debts of NT$30 billion.

Currently, the financial restructuring fund has NT$22.4 billion in assets, but it can only utilize NT$1.7 billion after setting aside NT$20.7 billion to help farmers’ and fishermen’s associations. The restructuring fund has spent NT$275.3 billion bailing out troubled banks since its establishment in 2001, government figures showed.

On Sunday, union members at Bank of Taiwan staged a demonstration in front of the Ministry of Finance to protest the bank’s planned acquisition of Chinfon on the grounds that the deal may water down the bank’s profits and employee benefits.

Bank of Taiwan chairwoman Susan Chang (張秀蓮) said she would respect the opinion of employees.

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