MOF backs M&A of state banks

TAX CUT::The ministry and the Financial Supervisory Commission reached a consensus to halve the futures transaction tax to 0.00002 percent in a bid to boost trade volumes

By Amy Su  /  Staff reporter

Thu, Mar 14, 2013 - Page 13

The government supports mergers and acquisitions (M&A) among state-owned financial institutions to enhance their competitiveness, as long as they do not undermine national interests, Minister of Finance Chang Sheng-ford (張盛和) said yesterday.

The Land Bank of Taiwan (土地銀行), Chang Hwa Commercial Bank (彰化銀行) and Taiwan Business Bank (台灣企銀) are the only three state-owned banks that have not been involved in mergers and acquisitions, the minister said, raising the possibility of the three being consolidated.

“We will maintain an optimistic and supportive view if the mergers do not hurt national interests and enlarge [the participants’] business scale and competitiveness,” Chang said during a question-and-answer session at the legislature’s Finance Committee.

Compared with a merger between public and private banks, consolidating state-owned banks will have limited impact on the ministry’s shareholding, Chang said.

Nonetheless, such a move needs further evaluation, he said, adding that timing and willingness on both sides are vital to a merger.

Taking Chang Hwa Bank as an example, Chang said it was in talks with Taiwan Cooperative Bank (合作金庫銀行) last year for a potential merger.

However, the two sides failed to reach a consensus after Taishin Financial Holding Co (台新金控) — a major shareholder of Chang Hwa Bank — set a high price of NT$26 per share to sell its 22.5 percent stake in the bank, he added.

In related news, the ministry and the Financial Supervisory Commission yesterday reached a consensus on a proposal to cut the futures transaction tax, at a meeting presided by Minister Without Portfolio Schive Chi (薛琦).

Representatives from both agencies agreed to cut the tax by 50 percent — to 0.00002 percent from 0.00004 percent — the commission said in a statement.

The commission had proposed cutting it to 0.001 percent, but the ministry only agreed to cut it to 0.002 percent.

Citing a report by the commission, Chang said the rate cut could create 400 to 500 job opportunities, with potential tax losses from the cut expected to be recovered after two years.

Data show that cutting the futures transaction tax has helped boost the financial market’s momentum in the past, he said.