Premier Chang: Taiwan Financial Holding Co. Established by Year-end

    According to a Ministry of Finance report on “Follow-up Methods for the Second Financial Reform” that was approved recently by the Executive Yuan, the Bank of Taiwan (BOT), Land Bank of Taiwan, and Export-Import Bank of the ROC will be merged into a national-class “Taiwan Financial Holding Co.” as part of the effort to upgrade the overall competitiveness of the island’s financial industry. The holding company is expected to have assets of NT$158.8 billion, ranking 18th among Asian banks and 89th in the world.

 

        Premier Chang Chun-hsiung points out that following the implementation of the Financial Holding Company Act, domestic financial institutions have established holding companies one after another as a means of heightening their operating efficiency and competitiveness. However, Taiwan ’s financial holding companies have met with strong challenges from international holding companies, which enjoy the advantages of huge size, international awareness, product development capability, and global branch networks. The establishment of a national-class financial holding company in Taiwan , therefore, is an urgent matter.

 

        According to the current plan, the Taiwan Financial Holding Co. will be set up in stages. In the first stage, the BOT, Land Bank, and Ex-Im Bank will convert themselves into subsidiaries of the financial holding company through a share swap by the end of this year; at the same time, the BOT will hive off its life insurance and securities businesses into separate subsidiaries. In the second stage, the BOT and Ex-Im Bank subsidiaries will merge, the Ex-Im Bank’s insurance business will be transformed into an export-import insurance subsidiary, and the Land Bank’s securities business will be absorbed into the securities subsidiary. In the third stage, the BOT and Land Bank subsidiaries will be merged. All this is expected to be completed within two to three years following the establishment of the financial holding company. In addition, the industrialized management of the holding company will be facilitated through a relaxation of rules governing personnel, compensation, spending, and budgets.

 

        The new holding company will be a national-class operation in terms consumer finance, corporate finance, foreign exchange, and wealth management, with projected 18.8% and 19% shares of the domestic deposit and loan markets, respectively. This will make it the foremost bank in Taiwan . It will have 308 domestic branches and 16 overseas units, giving it good globalized deployment. It will also be able to realize excellent synergetic effects and economies of scale, enabling it to stimulate an overall upgrading of the international competitiveness of the domestic financial industry. For further information, please go online and visit this website: http://www.mof.gov.tw/ct.asp?xItem=40687&ctNode=657&mp=1.

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