The Success Critical Factors for the M&Asbetween Taiwan Commercial Banks and Credit Cooperatives

• Main Author: 劉景中
• Other Authors: 余尚武
• Format: Others
• Language: zh-TW
• Published: 2000
• Online Access: http://ndltd.ncl.edu.tw/handle/46800446175858504645

碩士 === 國立臺灣科技大學 === 管理研究所 === 88 === Recently, there are more and more M&As in the international financial industry, not only larger and larger in terms of size, mergers between different sectors(eg. Banks and insurance companies) also occur. However, there was no self-motivated M&As in local banking sector due to three main reasons: (1) market protection policy of the government, (2) lose-face concern and (3) no appropriate governing law and tax incentives. Only after the setup of 16 privately-owned commercial banks in 1992, the encouragement for foreign banks to set up more branches, diversified financial products and progress in information technology, local banks started to feel the threats and operational difficulties, and they have to think stratigically how to rapidly grow in size, to diversify products/services and to operate internationally. Therefore, there were many cases of M&As between local commercial banks and credit cooperatives in 1997 and 1998. Immediate effects were witnessed in terms of operation branches increase, wider geography coverage and rising market share; however, some acquiring banks suffered from loan asset deterioration, lowering market share and employee complaints…one year after the acquisition. So, it is interesting to find out (1) the attributes of successful M&As, (2) generic critical factors for the success or failure of an M&A and (3) build a model of Success Critical Factors of local bank M&A. Having this in mind, the author reviewed books and papers, talked to the market experts in M&As and interviewed most of the banks which had acquisitions during that period and concluded as following: 1. Instead of one or two single factors which have influence on the success or failure of local bank M&As, it is the result of the interactions of several critical factors during the process of M&As. 2. Build the Success Critical Factor Model as per stages, that is: Planing Stage, Due-Diligence Stage and Consolidating Stage; there are in total eleven critical factors introduced in these three stages, which include: clearly defined M&A objectives, well-prepared M&A plan, complete understanding of target, set-up of cross-department Apprasal Team, detailed due-diligence, quick consolidation of system and human resources and continuously review the implementation of M&A plan. Hopefully, all the findings would be of assistance as a guidebook for the banks who are interested in M&As in local banking sector.