Taishin Financial Holding Co (台新金控) yesterday expressed willingness to sell its stake in Chang Hwa Commercial Bank (彰化銀行) to the government if it is serious about consolidating state-run financial institutions to create a regional champion.
“We welcome the government to buy our shares in Chang Hwa Bank in a bid to consolidate state-run financial institutions and help them develop into leading regional players,” Taishin chief financial officer Welch Lin (林維俊) told an investors’ conference.
Taishin Financial controls 22.5 percent shares in Chang Hwa Bank, making it the largest shareholder, with a majority control in its board.
The government should take Chang Hwa into consideration, while encouraging domestic financial institutions to expand through acquisitions and mergers, Lin said.
Taishin Financial is to price its stake on par with the book value of NT$45.4 billion (US$1.5 billion), translating into NT$26 earnings per share (EPS), compared with NT$36.57 billion, or EPS of NT$26.12 when Taishin bought the shares from the government in 2005.
The bank-focused conglomerate has since tried unsuccessfully to integrate Chang Hwa due to protests from unions and the legislature, since Chang Hwa owns larger assets.
“We cannot compromise the interest of 200,000 Taishin Financial shareholders in dealing with the issue,” Lin said.
Apart from larger assets, Chang Hwa owns seven branches overseas, including one in the China’s Kunshan, allowing the lender to take advantage of the Chinese market’s higher profit margin and bigger banking business.
Taishin International Bank (台新銀行), the main holding of Taishin Financial, owns only one foreign branch in Hong Kong and its plan to enter China cannot be realized unless the cross-strait service trade pact first clears the legislature.
Taishin Financial — which posted NT$6.14 billion in net profit from January to last month, or NT$0.77 per share — expects monthly income from the treasury market unit to shrink to NT$200 million from a monthly average of NT$300 million in the first quarter, as the Financial Supervisory Commission discourages active sales of risky financial derivatives, company president Joseph Jao (饒世湛) said.
The banking arm is slated to open a branch in Singapore next month and another one in Brisbane, Australia, by the end of the year, as the group seeks to strengthen its presence overseas, Jao said.
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