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Industry consolidation in Taiwan, Asia's fourth-largest retail banking market, continues as the government announced its intention to merge three publicly owned banks. The country's financial services sector continues to attract the attention of foreign raiders
The Financial Supervisory Commission (FSC) in Taipei has proposed allowing foreign and local investors to fully own domestic banks in a measure to spur consolidation in the island's over-banked financial services industry. At present, only the government and financial holding companies may hold more than 25 percent of a Taiwanese bank.
The proposed legislation needs approval by the cabinet and parliament, commission officials stressed. Investors will be asked to seek permission from the regulator whenever their proposed ownership in a bank would exceed 10 percent, 25 percent or 50 percent, they said.
Under the existing rules, investors that are not classified as financial holding companies can take control of local banks when they are in a distressed state. Revising the bank ownership law would bring it into line with international standards and help facilitate financial consolidation, officials noted.
The Taipei government has also confirmed its determination to merge three wholly state-owned banks into a holding company, despite a move by the opposition in parliament to halt the project. The newly merged bank, Taiwan Financial Holding Company, will combine the Bank of Taiwan, the Land Bank of Taiwan and the Export-Import Bank of the Republic of China.
According to the government, the new entity will emerge as the country's largest financial services group, with assets...