The Ministry of Finance is determined to push for mergers of government-invested financial holdings in a bid to help the local banking sector set up larger banks that can be regionally competitive.
In a radio interview, Minister of Finance Chang Sheng-ford (張盛和) said that since financial authorities have a say in any possible mergers of government-invested financial institutions, achieving such consolidations could be easier.
Chang said that as Taiwan seeks participation in the proposed Trans-Pacific Partnership and the Regional Comprehensive Economic Partnership, efforts to set up a regional bank in the nation have become particularly important in preparation for potential challenges.
According to Chang, the 39 banks that are registered in Taiwan are relatively small, which makes it difficult for the local banking sector to stand out in the region.
Chang said that one such merger could be between Mega Financial Holding Co (兆豐金控), which owns the flagship Mega International Commercial Bank (兆豐商銀), and First Financial Holding Co (第一金控) or Taiwan Cooperative Financial Holding Co (合作金控).
First Financial operates First Commercial Bank (第一銀行), while Taiwan Cooperative Financial has Taiwan Cooperative Bank (合作金庫銀行).
Chang said that Mega Bank, which has strong overseas operations, has a better chance of becoming a regional bank to compete with its Asian counterparts, such as Singapore’s DBS Bank, South Korea’s Hana Bank, Malaysia’s MayBank and the Industrial and Commercial Bank of China (中國工商銀行).
Chang said overseas sales generated by Mega Financial account for 59 percent of the financial holding company’s total revenue.
The official said that any merger should deliver synergy and that he believes First Financial or Taiwan Cooperative Financial, both of which are strong in consumer banking and insurance businesses, could become good partners for Mega Financial.
While he said that his ministry has not set a fixed time frame for any mergers of government-invested financial holding companies, he stressed that he will push for such combinations for as long as he remains finance minister.
Chang said the government will make every effort to ensure transparency during any merger process to avoid the irregularities and corruption that were seen in the previous round of financial reforms.