Among the nation’s 24 publicly traded banks, Chinatrust Commercial Bank (中國信託商銀), Mega International Commercial Bank (兆豐國際商銀), Taipei Fubon Bank (台北富邦銀行), Cathay United Bank (國泰世華銀行) and Taiwan Cooperative Bank (合作金庫銀行) performed best in the first quarter, a university study found.
Chinatrust performed best in terms of management and profitability, the National Taiwan University (NTU) Center for the Study of Banking and Finance said.
In the first quarter, Taiwan Cooperative had the largest market capitalization, Entie Commercial Bank (安泰銀行) saw the biggest savings and loan growth and Cosmos Bank Taiwan (萬泰銀行) had the lowest debt ratio after receiving a capital injection from SAC Private Capital Group and GE Money, the report said.
Cosmos, Jih Sun International Bank (日盛國際商銀), Bank of Kaohsiung (高雄銀行) and Union Bank of Taiwan (聯邦銀行) were the four banks with the worst profitability and performance in savings and loans operations.
“These laggard banks are likely to be edged out of the market or fail,” the center’s director, finance professor Hwang Dar-yeh (黃達業), said at a presentation of the report.
Once Taiwan and China sign a memorandum of understanding (MOU) on financial supervision, the best-performing banks, especially private banks, will have better chances of expanding their operations into China, while state-run banks may gradually lose their advantages, he said.
“State-run banks account for 60 percent of the sector’s total assets, but are doing poorly in terms of management,” Hwang said, urging the sector to continue its consolidation.
Chinese banks that want to enter the local market may seek to acquire mid-sized Taiwanese banks to take advantage of Taiwan’s financial talent and expertise, Hwang said.
Meanwhile, the report said Ta Chong Bank (大眾銀行) posted the biggest performance improvement, with profitability leaping to 13th place last year from 23rd place in 2007.
The report also identified Taishin International Bank (台新銀行) as a “rising star” for its consumer banking performance.
During the first three months, Yuanta Bank (元大銀行), Entie Commercial and China Development Industrial Bank (開發工銀) saw big improvements in management, while the asset quality of Taiwan Business Bank (台灣企銀) and Bank SinoPac (永豐銀行) deteriorated, the report said.
State-owned Bank of Taiwan (台灣銀行) and privately held Shanghai Commercial & Savings Bank (上海商銀) were not included in the study but seem to have performed well, Hwang said.