(Taiwan) – Two just completed large bank mergers in Taiwan, worth nearly US$6 billion, is seen to be the start of a move forcing smaller rivals to accelerate a consolidation process in a highly competitive market, still burdened with bad debts and weak profits.Taiwan’s 52 banks also need to build scale if they are to seriously look at the rapidly opening China market and leverage off the significant number of Taiwanese manufacturing customers already on the mainland.
The US$2.4 billion merger of Fubon Financial Holding Co and government supported Taipeibank has created the country’s fourth biggest financial group. Cathay Financial Holdings, Taiwan’s largest listed financial group, is paying US$3.4 billion in stock for United World Chinese Commercial Bank, in Taiwan’s largest corporate acquisition deal. Both players are now in the top 10 financial groups in the region outside Japan and Australia.
The three failed bidders for Taipeibank, Chinatrust Financial Holding, China Development Financial and Yuanta-Core Pacific Securities, are cashed up and looking to alternative purchases.
At the same time Government initiatives have acted to accelerate the cross-selling of financial products and created financial products supermarkets with offerings in insurance, brokerage and wealth management.