| Summary: | 碩士 === 國立臺灣大學 === 國際企業學研究所 === 90 === Empirical Study on Transforming and Merging Performance
of
Credit Cooperatives
Abstract
This is a case study, which selects 7 transforming ( merging ) banks including Hwatai Bank, Sunny Bank, Cota Commercial Bank, Makoto Commercial Bank, Lucky Bank, Bank of Pan Shin, and Kao Shin Commercial Bank. By means of statistical analysis of t test and correlation, we compare and analyze the pre- and post-transforming （merging）ratios of pre-tax margin, return on assets, return on equity, equity to loan, debt to equity, deposit to equity, liquidity reserves, time deposits to total deposits, per-employee contribution, deposit growth, loan growth, etc. In order to scrutinize whether the transformation（merger） of credit cooperatives has the positive effect, we also compare those ratios with the ratios of medium business banks and similar-sized credit cooperatives. At the same time, from the questionnaires aimed at the CEOs, employees of above-mentioned 7 banks and the remaining 39 operating credit cooperatives, we have found the results as follows:
1. Financial indicators of t test analysis: Most of transforming（merging） banks have no positive effect. However, in comparison with the medium business banks, there is a positive effect. By contrast, there has been no positive effect in their comparison with the similar-sized credit cooperatives. All those profitability indicators of three kinds of financial institutions are downward sliding. Among them, the medium business banks are deteriorating most seriously. The performance of commercial banks in merger is better than that of pre-merger credit cooperatives. No matter it is transforming, merger and acquisition, or transforming then acquisition, the operating performance indicators show a positive correlation. In all, the operating outcome of those transforming （merging）banks is consistent with the other financial institutions of Taiwan.
2.Questionnaire: Most of the chairmen, presidents and employees think that the materialized effects of transformation（merger） are larger operating scale and escalating competitiveness. The least effects are the increase of profitability, control of management cost and fusion of organization culture. This result of questionnaires showing no positive effect is coincident with the financial sector indicators. With regard to the opinion of chairmen and presidents of operating credit cooperatives, most of them insist on the cooperative system or the strategic alliance. They also hope the government to amend the related laws and ease the restrictions as soon as possible.
3. The Asian Financial Crisis in 1997 also had a great impact on Taiwan’s economy. The reasons of no positive effect arising from transformation or merger, were partially due to the poor performance of those acquired credit cooperatives. But the declining macro economic situation also bore an adverse influence. From the overall financial circumstances, we observe that the transformation and merger of credit cooperatives will bring the great positive significance on improving the financial order and escalating the competitiveness.
According to the aforementioned conclusion, we would like to suggest the following:
1. Financial institutions: To consider prudentially what is the self-position and core value. To introduce the new management concept, technique and professional personnel. To consider the strategic alliance or cooperate with the other domestic or foreign financial institutions to set up the holding company.
2.Credit cooperatives: To consider the possibility of transforming or merger, or otherwise to assess its own operating characteristics, performing position and direction, then segment the business objectives. To introduce the professional personnel and re-engineer the organization. To enhance the competitiveness by the strategic alliance.
3.Government or authority concerned: To increase the incentives about the transformation or merger of credit cooperatives and play a good role of guidance. To be prudential when selecting consolidating model to solve the problems of fundamental financial institutions.
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