Taishin Financial Holding Co (台新金控) yesterday urged the government to take steps to boost Taiwan’s service sector if it is serious about rebalancing the nation’s export-oriented economy.
The conglomerate said this would make the economy less vulnerable to external impacts, as service industries account for an important share of GDP in advanced economies.
Taishin Financial made the plea after President Ma Ying-jeou (馬英九) recently pledged to develop modern service industries in Taiwan, reviving the conglomerate’s hopes of resolving its longstanding dispute with the Ministry of Finance over the fate of Chang Hwa Commercial Bank (彰化銀行).
Taishin Financial has tried to merge its main subsidiary, Taishin International Bank (台新銀行), with Chang Hwa Bank, in which the group is the majority shareholder with a 22.5 percent stake, but has to share management responsibilities with government-appointed executives, since the ministry is the second-largest shareholder, with about 20 percent of shares.
“Without a strong modern service industry, Taiwan cannot increase its competitiveness on the world stage,” Taishin Financial spokesman Welch Lin (林維俊) said.
The financial sector is the backbone of modern service industries, accounting for 70.4 percent of GDP in the UK, 58 percent in the US, 55.2 percent in Singapore and 49.1 percent in Hong Kong, Lin said.
In Taiwan, the figure is only 25.8 percent, suggesting ample room for growth, Lin said, adding that the government could lend a helping hand with supportive policy measures.
Domestic financial institutions have difficulty improving their earnings ability because of excessive competition amid a fragmented and crowded field, Lin said, although they can offer high value-added services.
“Taishin Financial will temporarily slow down its push for the merger, but it will not compromise the rights of 200,000 shareholders,” Lin said, indicating that the company would not give up the idea altogether.
Taishin Financial shareholders in June authorized company chairman Thomas Wu (吳東亮) to take legal steps, if necessary, to integrate the two banks. One week later, Chang Hwa Bank’s executive directors approved plans to study the matter.
The former state-run lender, where Taishin Financial controls a majority in the boardroom, has put the merger on hold in a show of goodwill to newly installed Financial Supervisory Commission (FSC) Chairman William Tseng (曾銘宗), Lin said.
“We hope that under Tseng’s leadership the FSC will formulate policies” favorable for financial institutions, Lin said.
Taishin Financial will also halt efforts to expand into the life insurance industry until the Chang Hwa Bank merger is no longer in limbo, Lin said.
In March the FSC rejected Taishin Financial’s attempt to buy the local unit of New York Life Co, citing concerns over its capital strength.
Taishin Financial shares closed 1.18 percent lower at NT$12.6 yesterday, underperforming the TAIEX, which fell 0.86 percent, Taiwan Stock Exchange data showed.
SETBACK: Apple’s India iPhone push has been disrupted after Foxconn recalled hundreds of Chinese engineers, amid Beijing’s attempts to curb tech transfers Apple Inc assembly partner Hon Hai Precision Industry Co (鴻海精密), also known internationally as Foxconn Technology Group (富士康科技集團), has recalled about 300 Chinese engineers from a factory in India, the latest setback for the iPhone maker’s push to rapidly expand in the country. The extraction of Chinese workers from the factory of Yuzhan Technology (India) Private Ltd, a Hon Hai component unit, in southern Tamil Nadu state, is the second such move in a few months. The company has started flying in Taiwanese engineers to replace staff leaving, people familiar with the matter said, asking not to be named, as the
The prices of gasoline and diesel at domestic fuel stations are to rise NT$0.1 and NT$0.4 per liter this week respectively, after international crude oil prices rose last week, CPC Corp, Taiwan (台灣中油) and Formosa Petrochemical Corp (台塑石化) announced yesterday. Effective today, gasoline prices at CPC and Formosa stations are to rise to NT$27.3, NT$28.8 and NT$30.8 per liter for 92, 95 and 98-octane unleaded gasoline respectively, the companies said in separate statements. The price of premium diesel is to rise to NT$26.2 per liter at CPC stations and NT$26 at Formosa pumps, they said. The announcements came after international crude oil prices
DOLLAR SIGNS: The central bank rejected claims that the NT dollar had appreciated 10 percentage points more than the yen or the won against the greenback The New Taiwan dollar yesterday fell for a sixth day to its weakest level in three months, driven by equity-related outflows and reactions to an economics official’s exchange rate remarks. The NT dollar slid NT$0.197, or 0.65 percent, to close at NT$30.505 per US dollar, central bank data showed. The local currency has depreciated 1.97 percent so far this month, ranking as the weakest performer among Asian currencies. Dealers attributed the retreat to foreign investors wiring capital gains and dividends abroad after taking profit in local shares. They also pointed to reports that Washington might consider taking equity stakes in chipmakers, including Taiwan Semiconductor
STABLE DEMAND: Delta supplies US clients in the aerospace, defense and machinery segments, and expects second-half sales to be similar to the first half Delta Electronics Inc (台達電) expects its US automation business to remain steady in the second half, with no signs of weakening client demand. With demand from US clients remaining solid, its performance in the second half is expected to be similar to that of the first half, Andy Liu (劉佳容), general manager of the company’s industrial automation business group, said on the sidelines of the Taiwan Automation Intelligence and Robot Show in Taipei on Wednesday. The company earlier reported that revenue from its automation business grew 7 percent year-on-year to NT$27.22 billion (US$889.98 million) in the first half, accounting for 11 percent