Gov't seen as a pushover in CHB-Taishin deal: expert
The China Post news staffTAIPEI, Taiwan -- The Ministry of Finance is opposing a merger between the quasi-state Chang Hwa Bank and Taishin Commercial Bank because of the perception that Taishin is calling all the shots, said an expert yesterday.
February 22, 2013, 4:50 pm TWN
“Orderly integration of financial institutions in the market is needed, yet in the case of a merger between Chang Hwa and Taishin, the government's role is greatly diminished,” said Yin Nai-ping, professor of finance at National Chengchi University.
Talks of a merger between the two have gone on for seven years and began in 2005 with Taishin purchasing a 22.5-percent stake in Chang Hwa. Taishing subsequently boosted its holdings to 25 percent. The merger however has not taken place.
On Wednesday, Taishin Financial, parent company of Taishin Commercial Bank, proposed that its banking unit be merged into Chang Hwa to complete the deal once and for all. The Ministry of Finance, the major stakeholder in Chang Hwa, vehemently opposed the deal, which it said would go against public interest.
“If the government, which has a majority stake in Chang Hwa, is the one that spearheads the whole deal, then there is no reason that the MOF should object to this,” Yin said. “Yet now, there is a perception that Taishin is calling all the shots, and the government is a mere pushover. It doesn't like that.”
Both Chang Hwa Bank and Taishin Financial fell yesterday, after Wednesday's surge on investors' knee-jerk reactions to the proposed deal. Chang Hwa and Taishin closed at NT$16.9 and NT$12.2, respectively, down 2.59 percent and 3.94 percent.