The China Development Industrial Bank (中華開發), Taiwan's largest bank by market value, plans to merge with China United Trust & Investment Ltd (中聯信託), the Chinese-language media reported yesterday.
With the announcement, they become the latest banks to announce mergers under the government's plan to promote consolidation in the financial sector.
The reports did not cite sources on the bank merger, but said the merger would be announced tomorrow. Officials from the institutions could not be reached for comment yesterday.
"The merger would help the competitive landscape of Taiwan's financial sector after a longstanding status quo," said Spencer White, head of research at Merrill Lynch in Taipei.
The government has been trying to encourage bank mergers in Taiwan ahead of the nation's entry into the WTO. Taiwan has over 350 banks and cooperatives, many of them lacking the size or international experience to compete once the financial market opens to foreign firms.
Legislators passed a bank merger law on Nov. 24, and are considering a bill later this year that will allow banks, insurers, investment management companies and securities firms to be operated by one institution.
According to company president Benny Hu (
The government also has plans for Taiwan Cooperative Bank (台灣合作金庫) to take over rival Chinfon Bank (金豐).
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