03.13.2001
Bank of Taiwan, Land Bank and Central Trust merge

• The Ministry of Finance (MoF) has announced a merger between the three government-linked banks, Bank of Taiwan (unlisted), Land Bank (unlisted) and Central Trust of China (unlisted). It is the largest local bank merger ever.

• The MoF expects the merger to be completed by the beginning of next year. The merged entity will be the largest bank in Taiwan, with total asset value of NT$3.96t. It will rank 74th in the world in terms of size.

• The entity's share of the loan and deposit markets will increase to around 20%. The MoF intends domestic bank mergers, designed to upgrade Taiwan's highly fragmented banking industry, to raise market share of the final entity by over 15%.

• We see the sheer size of this merger as representing a milestone in the history of Taiwan's banking industry. However, we do not foresee much synergy for the combined entity. The expected reduction in staff numbers will not be seen in this case. The MoF will continue its aggressive drive to encourage more bank mergers in the future.

WilliamFong@Primasia.com +886-[0]2-2547-8865