The government plans to expedite the merger of three state-owned banks to create a financial holding company, Premier Chang Chun-hsiung (張俊雄) said yesterday.
During the Cabinet's regular meeting yesterday morning, Chang said the Ministry of Finance would draft the plan to establish Taiwan Financial Holding Co (
"We expect this new company will become the leading financial holding company in the country and help enhance the competitiveness of the nation's banking sector," Chang said.
Taiwan Financial Holding will be formed as a result of the merger of Bank of Taiwan (
The resulting holding company is expected to garner a local market share of at least 10 percent, Chang said. It will rank as the 18th-largest bank in Asia, he added.
The plan to form a new state-owned financial holding company is part of the government's effort to consolidate the sector to compete with foreign banks at home and abroad.
Deputy Minister of Finance Liu Teng-cheng (
As of the end of March, Cathay Financial Holding's total assets were NT$3.53 trillion (US$107.03 billion).
The new holding company will be formed in three stages with the process, including the integration of the three banking units, expected to take two to three years, Liu said.
Taiwan Financial Holding will also comprise a securities company and a life insurance company, he added.
Liu did not say who would chair the new company. Sources at the ministry, however, suggested that Bank of Taiwan chairman Tsai Jer-shyong (
The three banks which will comprise the new holding company aren't publicly traded and Liu said the ministry has no plans to list Taiwan Financial Holding on the local bourse.
Bank of Taiwan is the largest local bank with 179 branches, enjoying strong financial support from the government. Land Bank is also a policy lender with a network of 156 branches, the financial regulator's data shows.
Last month, Bank of Taiwan acquired another state-run firm, Central Trust of China (中央信託局). That deal is expected to have a limited impact on its financial profile, Fitch Ratings said on Aug. 8.
"The establishment of the state-run financial holding company will not affect the nation's banking industry in the short-term," Susan Chu (
In creating the new holding company, the government said it would use Mega Financial Holding Co (
However, Chu said Mega Financial's performance after the merger with state-controlled Chiao Tung Bank (交通銀行) and International Commercial Bank of China (中國國際商銀) in August last year had not been impressive.
The merger of state-owned banks usually meets with strong opposition from labor unions, Chu said, adding this meant a reduction in personnel was not likely.
Such integrations created firms boasting size, but not necessarily synergy or efficiency, she said.
Asked about the new financial holding company's potential synergy, the Ministry of Finance said that the Bank of Taiwan is strong in corporate banking, international finance and foreign currency exchange, while the Land Bank focuses on real estate financing and the Export-Import Bank specializes in trade financing.
"The three complement each other," it said on its Web site.
‘ABUSE OF POWER’: Lee Chun-yi allegedly used a Control Yuan vehicle to transport his dog to a pet grooming salon and take his wife to restaurants, media reports said Control Yuan Secretary-General Lee Chun-yi (李俊俋) resigned on Sunday night, admitting that he had misused a government vehicle, as reported by the media. Control Yuan Vice President Lee Hung-chun (李鴻鈞) yesterday apologized to the public over the issue. The watchdog body would follow up on similar accusations made by the Chinese Nationalist Party (KMT) and would investigate the alleged misuse of government vehicles by three other Control Yuan members: Su Li-chiung (蘇麗瓊), Lin Yu-jung (林郁容) and Wang Jung-chang (王榮璋), Lee Hung-chun said. Lee Chun-yi in a statement apologized for using a Control Yuan vehicle to transport his dog to a
Taiwan yesterday denied Chinese allegations that its military was behind a cyberattack on a technology company in Guangzhou, after city authorities issued warrants for 20 suspects. The Guangzhou Municipal Public Security Bureau earlier yesterday issued warrants for 20 people it identified as members of the Information, Communications and Electronic Force Command (ICEFCOM). The bureau alleged they were behind a May 20 cyberattack targeting the backend system of a self-service facility at the company. “ICEFCOM, under Taiwan’s ruling Democratic Progressive Party, directed the illegal attack,” the warrant says. The bureau placed a bounty of 10,000 yuan (US$1,392) on each of the 20 people named in
The High Court yesterday found a New Taipei City woman guilty of charges related to helping Beijing secure surrender agreements from military service members. Lee Huei-hsin (李慧馨) was sentenced to six years and eight months in prison for breaching the National Security Act (國家安全法), making illegal compacts with government employees and bribery, the court said. The verdict is final. Lee, the manager of a temple in the city’s Lujhou District (蘆洲), was accused of arranging for eight service members to make surrender pledges to the Chinese People’s Liberation Army in exchange for money, the court said. The pledges, which required them to provide identification
INDO-PACIFIC REGION: Royal Navy ships exercise the right of freedom of navigation, including in the Taiwan Strait and South China Sea, the UK’s Tony Radakin told a summit Freedom of navigation in the Indo-Pacific region is as important as it is in the English Channel, British Chief of the Defence Staff Admiral Tony Radakin said at a summit in Singapore on Saturday. The remark came as the British Royal Navy’s flagship aircraft carrier, the HMS Prince of Wales, is on an eight-month deployment to the Indo-Pacific region as head of an international carrier strike group. “Upholding the UN Convention on the Law of the Sea, and with it, the principles of the freedom of navigation, in this part of the world matters to us just as it matters in the
RSS