The board of Taiwan Cooperative Bank (TCB, 合作金庫銀行) yesterday approved a plan to expand into a financial holding company to boost its operating efficiency, earnings ability and economic scale, the company said in a statement.
The state-run lender, in which the Ministry of Finance holds a 36.83 percent stake, will become the nation’s 16th financial conglomerate once the conversion plan gains approval from the Financial Supervisory Commission.
Taiwan Cooperative will carry out a share swap between the planned financial holding firm and the lender, the Cooperative Asset Management Corp (合庫資產管理) and Taiwan Cooperative Bills Finance Corp (合庫票券), the statement said.
Under the share swap scheme, individual shares in the new financial group may trade for one TCB share, three shares in the fund manager or 3.08 shares in the bills company, the statement said.
All three firms will become subsidiaries of the new conglomerate that will have capital of NT$62.23 billion (US$2.17 billion), the statement said.
The share swaps are to take effect on Dec. 1 providing the regulator gives the go-ahead, the statement said.
Furthermore, Taiwan Cooperative will spin off its brokerage business to pave the way for the establishment of a new securities house with capital of NT$3 billion, the company’s statement said.
The forthcoming financial holding firm will cut its capital by NT$3 billion upon creation, targeted for Dec. 2, according to the statement, adding that the brokerage will then join the group as a subsidiary.
TCB did not comment on whether its joint ventures with French banking group BNP Paribas — the BNP Paribas Assurance TCB Life Insurance Co (合作金庫人壽) and the upcoming BNP Paribas TCB Asset Management Co (合庫巴黎證券投信) — would be under the planned financial holding company.
BNP Paribas TCB Asset Management is to start operations later this month or next month, TCB said.
Meanwhile, TCB is seeking to actively expand in China.
The company’s board yesterday approved plans to sign cooperation agreements with Agricultural Bank of China (中國農業銀行) and China Development Bank (國家開發銀行), according to a separate statement.
The agreements aim to forge substantial cooperative ties between TCB and its Chinese peers, allowing TCB to tap into the Chinese market, the company’s statement said.