Nine institutions file for mergers

China Development Industrial Bank (中華開發銀行) said yesterday it has applied at the Ministry of Finance to set up a financial holding company, making it one of nine domestic financial institution to make this move on the same day.

The bank, which announced on Oct. 25 its plan to take over closely-held First Taiwan Securities Co (菁英證券), said in a statement yesterday that it will form a holding company to broaden its business.

The bank's chairman Liu Tai-ying (劉泰英) said the bank is in talks with several commercial banks, life insurance companies, non-life insurers and asset management services firms over the proposed financial holding company.

The finance ministry began taking applications from domestic financial institutions yesterday for the establishment of financial holding companies, hoping such a move will help strengthen Taiwan's financial sector ahead of the nation's entry into the World Trade Organization.

According to the ministry, nine domestic financial institutions filed applications yesterday, including China Development Bank, First Commercial Bank (第一銀行), E. Sun Commercial Bank (玉山銀行), Hua Nan Commercial Bank (華南銀行), Bank Sinopac (華信銀行), the Fubon Group (富邦銀行), Chinatrust Commercial Bank (中國信託銀行), Taishin International Bank (台新銀行) and Chiao Tung Bank (交通銀行).

Insurance giant Cathay Life Insurance Co (國泰人壽) said it is scheduled to submit an application to the ministry Monday, local media reported yesterday.

Cathay Life announced recently that it will acquire Capital Securities Corp (群益證券), Cathay United Bank (匯通銀行) and Tong Tai Insurance Co (東泰產險) for the formation of a financial holding company.

While more applications are expected to be tendered to the ministry, Taiwan can support about five or six financial holding companies, China Development Bank's Liu said. His words indicated that mergers among the holding companies should be expected in the second stage of development.

Indeed Minister of Finance Yen Ching-chang (顏慶章) said yesterday that Taiwan is likely to have no more than 10 financial holding companies during the second stage of the nation's bank restructuring.