Identifier
Created
Classification
Origin
07TAIPEI336
2007-02-12 08:58:00
UNCLASSIFIED
American Institute Taiwan, Taipei
Cable title:
Taiwan Merges Two State-owned Banks
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UNCLAS TAIPEI 000336
SIPDIS
SIPDIS
STATE PLEASE PASS USTR
STATE FOR EAP/RSP/TC, EAP/EP
USTR FOR ALTBACH AND STRATFORD
USDOC FOR 3132/USFCS/OIO/EAP/WZARIT
TREASURY FOR OASIA/LMOGHTADER
TREASURY ALSO PASS TO FEDERAL RESERVE/BOARD OF
GOVERNORS, SAN FRANCISCO FRB/TERESA CURRAN, AND NEW YORK FRB/MARA
BOLIS
E.O. 12958: N/A
TAGS: EINV EFIN ECON PINR TW
SUBJECT: Taiwan Merges Two State-owned Banks
SUMMARY
-------
UNCLAS TAIPEI 000336
SIPDIS
SIPDIS
STATE PLEASE PASS USTR
STATE FOR EAP/RSP/TC, EAP/EP
USTR FOR ALTBACH AND STRATFORD
USDOC FOR 3132/USFCS/OIO/EAP/WZARIT
TREASURY FOR OASIA/LMOGHTADER
TREASURY ALSO PASS TO FEDERAL RESERVE/BOARD OF
GOVERNORS, SAN FRANCISCO FRB/TERESA CURRAN, AND NEW YORK FRB/MARA
BOLIS
E.O. 12958: N/A
TAGS: EINV EFIN ECON PINR TW
SUBJECT: Taiwan Merges Two State-owned Banks
SUMMARY
--------------
1. Two state-owned enterprises, including the largest bank in
Taiwan, will merge in July 2007. The new entity will be Taiwan's
largest financial holding company and its banking unit will have
over 10% market share. END SUMMARY.
Two State-owned Enterprises
--------------
2. Taiwan's Ministry of Finance (MOF) recently announced that
Central Trust of China (CTC) will merge into Bank of Taiwan (BOT) in
July 2007. Taiwan's Fair Trade Commission approved the merger plan
in May 2006 and banking authorities granted permission in December
2006. In early January 2007, the Securities and Futures Bureau
authorized BOT to issue new shares to replace CTC shares at a ratio
of one BOT share for two CTC shares.
3. Currently, BOT is the largest bank in Taiwan. It has market
share of 9% in assets, 9% in deposits, and 8.5% in outstanding
loans. CTC ranks 36th in net worth and 26th in assets among
Taiwan's 42 banks. However, CTC is a giant in insurance. CTC is
the primary insurance provider for all Taiwan military personnel,
public school faculties, and civil service employees. It also
conducts procurement for public agencies.
Changes after Merger
--------------
4. After the merger, the new banking unit will remain the largest
bank in Taiwan, with market share of over 10%, total assets of
NT$2.93 trillion (US$88.8 billion),deposits of NT$2.29 trillion
(US$69.4 billion),and outstanding loans of NT$1.67 trillion
(US$50.6 billion).
5. According to the MOF, BOT will transform itself into a financial
holding company (FHC) after the merger. CTC's non-banking
departments will be reorganized as independent companies affiliated
with the new FHC. With the largest bank, the only insurance
provider to public employees, and the major public procurement
contractor, the new FHC will surpass Cathay as the largest one in
Taiwan.
YOUNG
SIPDIS
SIPDIS
STATE PLEASE PASS USTR
STATE FOR EAP/RSP/TC, EAP/EP
USTR FOR ALTBACH AND STRATFORD
USDOC FOR 3132/USFCS/OIO/EAP/WZARIT
TREASURY FOR OASIA/LMOGHTADER
TREASURY ALSO PASS TO FEDERAL RESERVE/BOARD OF
GOVERNORS, SAN FRANCISCO FRB/TERESA CURRAN, AND NEW YORK FRB/MARA
BOLIS
E.O. 12958: N/A
TAGS: EINV EFIN ECON PINR TW
SUBJECT: Taiwan Merges Two State-owned Banks
SUMMARY
--------------
1. Two state-owned enterprises, including the largest bank in
Taiwan, will merge in July 2007. The new entity will be Taiwan's
largest financial holding company and its banking unit will have
over 10% market share. END SUMMARY.
Two State-owned Enterprises
--------------
2. Taiwan's Ministry of Finance (MOF) recently announced that
Central Trust of China (CTC) will merge into Bank of Taiwan (BOT) in
July 2007. Taiwan's Fair Trade Commission approved the merger plan
in May 2006 and banking authorities granted permission in December
2006. In early January 2007, the Securities and Futures Bureau
authorized BOT to issue new shares to replace CTC shares at a ratio
of one BOT share for two CTC shares.
3. Currently, BOT is the largest bank in Taiwan. It has market
share of 9% in assets, 9% in deposits, and 8.5% in outstanding
loans. CTC ranks 36th in net worth and 26th in assets among
Taiwan's 42 banks. However, CTC is a giant in insurance. CTC is
the primary insurance provider for all Taiwan military personnel,
public school faculties, and civil service employees. It also
conducts procurement for public agencies.
Changes after Merger
--------------
4. After the merger, the new banking unit will remain the largest
bank in Taiwan, with market share of over 10%, total assets of
NT$2.93 trillion (US$88.8 billion),deposits of NT$2.29 trillion
(US$69.4 billion),and outstanding loans of NT$1.67 trillion
(US$50.6 billion).
5. According to the MOF, BOT will transform itself into a financial
holding company (FHC) after the merger. CTC's non-banking
departments will be reorganized as independent companies affiliated
with the new FHC. With the largest bank, the only insurance
provider to public employees, and the major public procurement
contractor, the new FHC will surpass Cathay as the largest one in
Taiwan.
YOUNG