Taiwan Cooperative Bank (TCB, 合作金庫), the domestic lender with the most branches, is aiming to reorganize itself as a financial holding company by the end of next year, a bank executive said yesterday.
John Chou (周叔璋), executive vice president at the state-run bank, said the lender will propose the reorganization at its shareholder conference in May or June before applying for approval from the Financial Supervisory Commission.
Taiwan Cooperative Bank currently has NT$60.2 billion (US$1.97 billion) in paid-in capital, higher than the minimum requirement of NT$60 billion needed to qualify as a financial holding firm, Chou said on the sidelines of a news conference to promote company charity events during the winter break.
“Taiwan Cooperative Bank, the second-largest bank by loan size after Bank of Taiwan (臺灣銀行), is on track to form a financial holding company and expects to realize that goal by the end of 2011,” Chou said.
To that end, the lender must also meet cross-business requirements by owning a securities house after setting up an insurance firm, BNP Paribas Assurance TCB Life Insurance Co (合作金庫人壽), in January.
In addition, a financial holding firm has to post assets of at least NT$750 billion, Financial -Supervisory Commission Banking Bureau deputy director-general Jean Chiu (邱淑貞) said by telephone.
Taiwan Cooperative Bank, with over NT$2.56 trillion in assets, has filed applications with the financial regulator to establish a securities brokerage and plans to open an investment trust company next month or in February, as the regulator is slated to give permission later this week, Chou said.
The new money manager will launch two investment funds after its creation, one equity fund and one bond fund, Chou said.
Looking to the future, Chou said he expected the bank’s pre-tax income to reach NT$9 billion next year after the amount totaled NT$8.29 billion as of the end of last month and is set to climb higher this month.
Taiwan Cooperative Bank, a leading home loan lender, posted a NT$6.99 billion net profit for the first 11 months of the year with interest and fee incomes contributing 85 percent and 15 percent respectively, company data showed.
The firm’s net interest margin stands at 1.1 percent and is expected to improve slightly next year as the central bank is likely to hike benchmark interest rates for the third time this year during its quarterly board meeting on Dec. 30, Chou said.
The lender plans to open its first Chinese branch in Suzhou, Jiangsu Province, next week to serve Taiwan businesspeople there, he said.
Another state-run rival, First Commercial Bank (第一銀行), a subsidiary of First Financial Holding Co (第一金控), will open its first Chinese branch this week.
Taiwan Cooperative Bank’s shares rose 0.22 percent to NT$23.20 yesterday, under-performing the 0.67 increase on the TAIEX.