First Commercial Bank (
First Commercial, one of the 12 state-run banks ordered by the government to spearhead mergers among the island's more than 50 banks, named "the two regional banks as merger targets in a preliminary proposal submitted to the finance ministry," spokesman Tseng Chien-chen said.
The island's No. 4 bank by market value is run by Chen Chien-lung, who spent 16 months running Bank of Kaohsiung and was the first member of the ruling Democratic Progressive Party to be named to the helm of a state-run bank. That appointment was seen as an attempt to boost reforms that were being held up by bankers allied to or members of the former ruling Nationalist Party.
That connection also means First Commercial has an insider's knowledge of Bank of Kaohsiung, which saw its overdue loan ratio more than halve under Chen's tenure.
"Our chairman knows the value of Bank of Kaohsiung inside-out," Tseng said.
Bank of Kaohsiung President Chuang Hsin-/hsiung declined to comment.
Executives at Enterprise Bank of Hualien, a closely held regional bank with operations concentrated in southern Hualien County, couldn't be reached for comment. First Commercial has one branch in Hualien.
First Commercial shares rose 3.1 percent to NT$23.40. Bank of Kaohsiung rose 6.7 percent to NT$11.25.
Chang Ming-daw, director of the finance ministry's domestic banking division, confirmed First Commercial's interest in merging with Bank of Kaohsiung and Enterprise Bank of Hualien, though he said the proposal is regarded as ``preliminary.'' The government owns a 24 percent stake in First Commercial, the island's fifth-largest publicly traded bank, and its board representatives traditionally serve as chairmen.
The company has a market value of NT$85 billion (US$2.6 billion), compared with NT$5 billion for Bank of Kaohsiung.
Enterprise is not traded.
First Commercial Chairman Chen Chien-lung's wife, Christine Tsung, three years ago returned to Taiwan from the US to help then-opposition DPP member Frank Hsieh in his victorious Kaohsiung city mayoral election.
The pair later campaigned for President Chen Shui-bian (
Other banks to have submitted merger proposals to the ministry were Chiao Tung Bank, Land Bank of Taiwan (
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