Taiwan Cooperative Financial Holding Co (合作金控) aims to shut at least five bank branches next year as the state-run firm takes steps to strengthen its financial proficiency and ease the nation’s overcrowded banking market, recently installed chairman Leon Shen (沈臨龍) said last week.
Shen, who took the helm of the nation’s fourth largest financial service provider by assets three months ago, said the company plans to downsize its banking network with at least five unprofitable branches in less populated districts to be merged with adjacent ones next year.
Taiwan Cooperative Bank (合作金庫銀行), the banking subsidiary and main source of income, has 296 branches nationwide after integrating with the state-run Farmers Bank (農民銀行) in May 2006.
“The branches are both assets and burdens for the group that will seek to strengthen its operations rather than increase its economies of scale under my stewardship,” Shen said in a public function on Thursday.
The company is still assessing the ideal size for the bank but Shen said 200 branches should suffice, given the overcrowded and fragmented market.
The planned downsizing would not be easy, Shen said, as workers unions are bound to protest and ask lawmakers to intervene.
To remove resistance, the company will keep in payroll intact but encourage early retirement with favorable compensation terms, he said.
With a doctoral degree in economics, Shen, 60, is a former chairman of the state-funded Taiwan Asset Management Co (台灣金聯資產管理) and served in different positions under the Ministry of Finance prior to that.
The bank expanded into a financial holding firm in December last year after teaming up with French banking group BNP Paribas to create an asset management unit in June last year and a life insurance subsidiary in 2010.
BNP Paribas Assurance TCB Life Insurance Co (合作金庫人壽) is endeavoring to break even next year and BNP Paribas TCB Asset Management Co (合庫巴黎證券投資信託) has yet to set a timetable as market volatility challenges earnings, Shen said.
While positive about business opportunities in Chinese yuan, Shen said Taiwan Cooperative Bank is no match for state-run Mega International Commercial Bank (兆豐國際商銀) or First Commercial Bank (第一銀行) in offering yuan-linked products and services. It will instead pursue a balanced growth, Shen said.
Currently, offshore banking operations generate 23 percent of Taiwan Cooperative Bank’s revenue and may contribute 25 percent next year, compared with 45 percent at Mega Bank, he said.
Taiwan Cooperative Financial may achieve profits of NT$9 billion (US$308 million) this year after the lending arm posted NT$591 million in net income for last month, lifting the bank’s total earnings to NT$6.44 billion as of last month, financial analysts said.
Real estate agent and property developer JSL Construction & Development Co (愛山林) led the average compensation rankings among companies listed on the Taiwan Stock Exchange (TWSE) last year, while contract chipmaker Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) finished 14th. JSL Construction paid its employees total average compensation of NT$4.78 million (US$159,701), down 13.5 percent from a year earlier, but still ahead of the most profitable listed tech giants, including TSMC, TWSE data showed. Last year, the average compensation (which includes salary, overtime, bonuses and allowances) paid by TSMC rose 21.6 percent to reach about NT$3.33 million, lifting its ranking by 10 notches
SEASONAL WEAKNESS: The combined revenue of the top 10 foundries fell 5.4%, but rush orders and China’s subsidies partially offset slowing demand Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) further solidified its dominance in the global wafer foundry business in the first quarter of this year, remaining far ahead of its closest rival, Samsung Electronics Co, TrendForce Corp (集邦科技) said yesterday. TSMC posted US$25.52 billion in sales in the January-to-March period, down 5 percent from the previous quarter, but its market share rose from 67.1 percent the previous quarter to 67.6 percent, TrendForce said in a report. While smartphone-related wafer shipments declined in the first quarter due to seasonal factors, solid demand for artificial intelligence (AI) and high-performance computing (HPC) devices and urgent TV-related orders
Prices of gasoline and diesel products at domestic fuel stations are this week to rise NT$0.2 and NT$0.3 per liter respectively, after international crude oil prices increased last week, CPC Corp, Taiwan (台灣中油) and Formosa Petrochemical Corp (台塑石化) said yesterday. International crude oil prices last week snapped a two-week losing streak as the geopolitical situation between Russia and Ukraine turned increasingly tense, CPC said in a statement. News that some oil production facilities in Alberta, Canada, were shut down due to wildfires and that US-Iran nuclear talks made no progress also helped push oil prices to a significant weekly gain, Formosa said
MINERAL DIPLOMACY: The Chinese commerce ministry said it approved applications for the export of rare earths in a move that could help ease US-China trade tensions Chinese Vice Premier He Lifeng (何立峰) is today to meet a US delegation for talks in the UK, Beijing announced on Saturday amid a fragile truce in the trade dispute between the two powers. He is to visit the UK from yesterday to Friday at the invitation of the British government, the Chinese Ministry of Foreign Affairs said in a statement. He and US representatives are to cochair the first meeting of the US-China economic and trade consultation mechanism, it said. US President Donald Trump on Friday announced that a new round of trade talks with China would start in London beginning today,
RSS