The finance ministry of Taiwan asked state-run Mega Financial Holding Company to evaluate a merger with its rival Chang Hwa Bank. This could be the largest merger in the banking industry in over 10 years, according to local newspaper reports on Monday.
Mega's top officials received instructions from the finance ministry to weigh the potential merger, according to the Commercial Times and the Economic Daily, the report said.
The papers also said a successful merger of the two financial institutions would fetch a combined net value of TWD100 billion (HKD26.2 billion), said the report.
Taiwan's banking industry has been hit with steep price cuts. The country was ranked among the lowest in returns on assets in Asia. One of the reasons for this is the factions within the sector, Reuters reported.
Mega Financial Holding Company is a state-run financial institution based in Taiwan. As of 2012, the firm has a total of eight subsidiaries. These subordinate companies cover banking, property and casualty insurance, securities, bills financing, asset management, venture capital business, and securities investment trust, according to the company's website.
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