Tue, Apr 01, 2014 - Page 13 News List

Cosmos Bank to maintain operations despite strike

By Crystal Hsu  /  Staff reporter

Cosmos Bank (萬泰銀行) said yesterday it has adopted measures to maintain normal operations in the event of a strike, prompting discontented workers to plan to call a vote tomorrow on the issue in a bid to protect their rights amid the bank’s upcoming integration into China Development Financial Holding Corp (中華開發金控).

China Development Financial on Feb. 10 inked a deal to buy Cosmos for NT$23.09 billion (US$759.39 million) via a share-swap scheme and cash as it seeks to expand into commercial and retail banking from the current focus on investment banking.

The agreement makes Cosmos the surviving party after the integration, likely by the end of July, if the Financial Supervisory Commission gives the go-ahead.

“We have taken necessary measures to maintain normal operations and protect the rights of customers should the strike take place,” a Cosmos communications official said by telephone.

The lender’s workers union plans to call a vote tomorrow on whether to strike indefinitely in the hope that the bank and their would-be employers would promise to lengthen their working rights or offer preferential severance compensations.

China Development Financial has pledged to retain Cosmos employees for another year and maintain their compensation terms.

The two sides are slated to hold extra shareholders’ meetings on Tuesday next week to approve the integration.

Before that, there is little China Development Financial can do to intervene, the buying party said.

The union, which has a membership of 1,000 from 1,500 employees, needs a majority in support to call a strike that would be the first among bank employees.

Shares in Cosmos ended flat at NT$14.83 in Taipei trading yesterday, weaker than the TAIEX’s 0.85 percent uptick, Taiwan Stock Exchange data showed.

Cosmos will continue to speak to union members and keep operations unaffected in the case of a strike, the lender said, adding it is not aware of the identity or number of union members.

“We will make sure to have sufficient front desk staffers since they have direct contact with customers,” the communications official said.

The lender has held 14 briefings at its 49 branches nationwide to calm potential jitters for the past two months.

Cosmos, the nation’s largest issuer of debit cards, turned profit in 2012 following a capital restructure in 2007 and widened its pre-tax income to NT$3.95 billion (US$129.3 million) last year, company data showed.

The earnings improvement allowed foreign shareholders including the SAC PCG and GE Money to exit with fair prices.

The financial regulator said it will take employee benefits into consideration when reviewing the ownership transfer.

Under the deal, Cosmos shareholders would receive 0.2 shares in China Development Financial as well as NT$13.4 per share in cash.

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