Chiao Tung Bank (交通銀行), United World Chinese Commercial Bank (世華銀行) and International Commercial Bank of China (中國國際商銀) will be merged as the government moves to spur more tieups among the nation's more than 400 lenders.
Local media yesterday cited Vice Premier Lai In-jaw (
"The government picked three healthy banks to merge, which will set a good example for others to follow," said Yeh Chin-lin, who manages Grand Cathay Securities Investment Trust Co's flagship Grand Cathay Fund. "The consolidation is much needed in Taiwan's banking industry."
Yet even as the government urges Taiwan's more than 50 banks and almost 400 other lenders to combine, the Bank of Taiwan (台灣銀行), Land Bank of Taiwan (土地銀行) and Central Trust of China (中央信託局) continue to operate as separate entities a year after the government announced their merger. Concerned by rising bad loans, authorities are increasing pressure on banks to combine.
Shares in the three banks, which together account for 15 percent of Taiwan's Banking and Insurance Index, rose by their daily limit of 7 percent yesterday on the report, which couldn't immediately be confirmed with the Ministry of Finance (財政部).
"So far our bank's board hasn't heard anything and internally we haven't had any discussions about it," said Chen Chi-chu, executive vice president of the International Commercial Bank of China. "If this [report] is really true, there's no harm in it -- basically United World and Chiao Tung are good banks."
Chiao Tung is a development bank with about 35 branches in Taiwan and abroad.
ICBC has 60 branches in Taiwan and another 20 overseas, while United World has 70 branches in Taiwan.
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