An application for merger filed by the Bank of Taiwan to acquire and quarantee all operations and assets and liabilities of the Dongang Credit Cooperative in Pingtung County
Chinese Taipei
Case:
An application for merger filed by the Bank of Taiwan to acquire and quarantee all operations and assets and liabilities of the Dongang Credit Cooperative in Pingtung County
Reference:
Fair Trade Commission Decision of September 15, 1999 (the 410th Commissioners' Meeting); Letter (88) Yi Tzu No. 881172-001
Industry:
Domestic Banking Industry (6512)
Relevant Law:
Summary:
Case description:
The Bank of Taiwan applied to acquire and guarantee all operations, assets
and liabilities of the Dongang Credit Cooperative in Pingtung County. Since
the sales of one of the participating enterprises in fiscal 1998 exceeded
NT$5 billion, an application for merger was filed in accordance with Article
11 of the Law.
Analysis and comments:
(1) The Bank of Taiwan's savings and loan balances accounted for 10.39%
and 9.4% of the savings and loan balances of all Chinese Taipei's financial
institutions as a whole. The savings and loan operations of Dongang Credit
Cooperative, on the other hand, were negligible. Due to a recent rapid loss
of savings account customers, its savings operations had become almost non-existent.
Statistics showed that there were 5,432 domestic financial institutions
across the island as of the end of August 1999. The Bank of Taiwan currently
has 102 business outlets, while Dongang Credit Cooperative has six outlets
in Pingtung county. After the merger, the Bank of Taiwan's outlets would
be increased to 108, accounting for 1.99% of the total number of financial
institutions. Prior to the merger, Pingtung had 178 financial institutions,
including two Bank of Taiwan outlets. Together with the existing six Dongang
Credit Cooperative outlets, the merger would result in eight Bank of Taiwan
outlets in Pingtung, accounting for only 4.49% of the total number in that
county. Taking into consideration the above factors, it can be seen that
the merger would have minimal impact on competition in the financial market.
(2) Adverse effects of the merger in terms of restraints on competition
were foreseen to be minimal. The Bank of Taiwan's acquisition of the Donggang
Credit Cooperative's operations was in line with the Ministry of Finance
policy to rescue poorly managed grassroots financial institutions. The merger
would help to safeguard the interests of the cooperative's depositors, and
would have a positive effect on maintaining order within the financial market.
(3) From the above analysis, it is evident that the merger would not result
in significant changes to the market structure. It would not result in immediate
restraints on competition, and the resulting overall economic benefit would
be greater than the disadvantages in terms of restraining competition. The
merger was therefore approved in accordance with the provisions of Article
12 of the Law. If the merger were to otherwise involve financial administration
regulations or other relevant laws and regulations, such matters should
of course be handled in accordance with law.
Summarized by Cheng P'eng-chi
Supervised by Hu Kuang-yu
Appendix:
Bank of Taiwan's Uniform Invoice Number: 91321902
Dongang Credit Cooperative's Uniform Invoice Number: 0355731