01.30.2001
Merger between government-linked banks goes into final stage

• Head of the Ministry of Finance, Mr Yan Xing Zhang, announced yesterday that his department will produce a bank-merger plan as an example for the industry with an aim for the ‘merged banks’ to be sizeable enough to control 15% to 20% of market share.

• The subjects for the merger include three non-listed banks: The Bank of Taiwan, The Land Bank of Taiwan and The Central Trust of China. The first two hold in excess of five percent market share, and may have an important role in forming the merger.

• Further, Chang Hwa Commercial Bank (2801 'Zhang Yin'), First Commercial Bank (2802 'Yi Yin'), and Hua Nan Commercial Bank (2803 'Hua Yin') each have about five percent market share and are prime candidates for merger.

• Mr Yan will conduct thorough discussions with directors of these banks. He has already received proposals from twelve government-linked banks regarding the M & A issue, and the MoF will examine these proposals to rationalize any unnecessary overlaps.

• In addition to the merger plan, the formation of RTC and the drafting of the financial holding company ordinance has provided some good news to the banking industry in Taiwan. Large-cap banks will continue to see buying interest from institutional investors.

WilliamFong@Primasia.com (886 2) 2547-8864