03.15.2001
Ratings adjusted in wake of merger news

• Coming after the Ministry of Finance's announcement of the merger between the three government-linked banks, Bank of Taiwan (unlisted), Land Bank (unlisted) and Central Trust of China (unlisted), Taiwan Ratings has adjusted its ratings outlook on two of the banks.

• The ratings outlook on Bank of Taiwan is downgraded to negative from stable, suggesting a deterioration of the bank's normally sound finances. Central Trust is upgraded to positive from stable, implying that this bank will benefit most from the merger.

• If there are no layoffs or branch closures, Taiwan Ratings does not foresee any significant improvement in the operations from the merged entity. It is also concerned about difficulties with systems integration, which will be the most challenging aspect of the merger. We expect it will take at least two years to achieve a complete integration of the three banks..

• Taiwan Ratings is a 50%-owned affiliate of Standard & Poors.

WilliamFong@Primasia.com +886-[0]2-2547-8864