Taiwan banks' 1999 return on net worth falls

Ulhas Joglekar ulhasj at bom4.vsnl.net.in
Sat Mar 4 18:16:15 PST 2000


28 February 2000

Taiwan banks' 1999 return on net worth falls TAIPEI: Taiwan banks' return on net worth fell last year and Finance Minister Paul Chiu called for mergers to improve competitiveness, the local Commercial Times newspaper reported on Sunday. Taiwan banks, excluding foreign branches, reported a 1999 return on net worth at 5.9 percent, down from 8.0 percent in 1998 and showing persistent declines since a high of 25.4 percent in 1991, the paper said, quoted central bank statistics. Domestic banks' combined 1999 pretax profits totalled T$104.2 billion (US$3.4 billion), down 14 percent from 1998, the paper said. "The repeated declines in domestic banks' return on net worth indeed issue a warning of overbanking," the paper quoted Chiu as saying at a seminar. "It's necessary for local banks to be integrated and merged." Chiu said overbanking has led to vicious price-cutting, resulting in poor profit returns. In December, the finance ministry announced plans to merge three big state banks and said the first private sector bank tie-up would be ready by mid-year. Chiu said Bank of Taiwan, Land Bank of Taiwan and Central Trust of China would submit details of their long-expected merger in June. Mergers are seen as crucial as the island gears up for World Trade Organisation entry in 2000. (Reuters) For reprint rights: Times Syndication Service
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