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.
A signaling system malfunction disrupted high-speed rail (HSR) services beginning at 8am today, with trains temporarily reduced to three northbound and three southbound trains per hour as authorities conduct inspections. The malfunction occurred on a section of track in Miaoli County during pre-operation checks early this morning, forcing northbound and southbound trains to use a single track, the HSR operator said. The regular schedule has been replaced with three hourly trains offering only nonreserved seating in each direction, stopping at every station, it said, adding that business class cars would still have reserved seating. Departures from terminal stations are scheduled at the top
DRONE CENTRAL: Taiwan aims to become Asia’s democratic hub for drones, with most exports focused on high-quality military-grade models, an official said Taiwan’s drone industry is expected to expand significantly by 2030, producing 100,000 units per month and exporting half of them, the Ministry of Economic Affairs said yesterday. Current drone production capacity is about 15,000 units per month, but the industry can quickly scale up as demand increases, Industrial Development Administration Director-General Chiou Chyou-huey (邱求慧) told a news conference in Taipei. Taiwan’s drone output grew 2.5-fold last year to NT$12.9 billion (US$408.3 million) under a government program to develop the uncrewed vehicle sector, he said. The Executive Yuan in October last year approved plans to invest NT$44.2 billion into domestic production of uncrewed aerial
Taiwan is still in the process of assessing the possibility of recruiting workers from Eswatini, the Ministry of Foreign Affairs said yesterday, adding that its goal is to help Eswatini upgrade its vocational training centers. If there are plans to recruit workers from Eswatini, safeguarding national security, protecting public health and ensuring the employment rights of Taiwanese would be prerequisites, Department of West Asian and African Affairs Director-General Yen Chia-liang (顏嘉良) told a news conference. Key considerations would also include filling labor shortages in specific industries, and fostering bilateral professional and technical exchanges, he said. Yen was asked about the progress of labor
VERBOSE VESSELS: A CGA cutter and a China Coast Guard exchanged verbal barbs for more than a day in Taiwanese-controlled waters before the Chinese vessel left The Taiwanese and Chinese coast guards had a standoff near the strategically located Pratas Islands (Dongsha Islands, 東沙群島) in the north of the South China Sea, the Coast Guard Administration (CGA) said yesterday. The two sides engaged in intense radio exchanges over sovereignty claims during the 33-hour standoff. China Coast Guard vessel 3501 eventually left the restricted waters, 26.6 nautical miles (49.2km) west of the Pratas Islands, at 5pm yesterday, the CGA said. Lying approximately between southern Taiwan and Hong Kong, the Taiwan-controlled Pratas are seen by some security experts as vulnerable to Chinese attack due to their distance — more than
RSS