Taishin Financial Holding Co (台新金控) yesterday pressed the Ministry of Finance to look beyond shareholdings when dealing with Chang Hwa Commercial Bank (彰化銀行), saying the banking industry needs to consolidate to stay competitive.
Taishin Financial spokesman Welch Lin (林維俊) said the conglomerate would continue to seek support from the ministry for the merger of Chang Hwa Bank and its banking subsidiary, Taishin International Bank (台新銀行), even though the ministry on Wednesday rejected the idea, saying it was “unfeasible.”
“All parties should look at the issue from a broad perspective ... It is in the interests of shareholders and employees if Chang Hwa Bank and Taishin Bank become one,” Lin said by telephone.
The integration could boost cross-selling efficiency and other synergy benefits, “allowing shareholders higher dividends and employees better compensations,” Lin said.
Taiwanese banks need to significantly increase their scale of economies if they are serious about competing on the international stage, Lin said, adding that foreign peers would not sit around while Taiwan stalls for political or other reasons.
Lin declined to comment on local media reports that the merger could decrease the government’s stake in Chang Hwa Bank from 20 percent to 12 percent, while raising Taishin Financial’s stake from 22.5 percent to 52.99 percent.
The change would come if the ministry agreed to a share swap scheme under which Chang Hwa Bank would issue 4.69 billion new shares to fund the acquisition of Taishin Bank, local media said.
Citigroup Global Markets (花旗環球財), Taishin Financial’s consultant, arrived at the scheme by pricing Taishin Bank shares at NT$15.54 each, local media said.
Lin offered an apology to the finance ministry over media reports that the ministry and Taishin Financial had reached a consensus on the merger during talks before the Lunar New Year.
“The two sides met, but did not form any consensus,” Lin said. “There is no need to cancel the discussions because of the misunderstanding.”