Study of Business Synergy Pre and Post Financial Holdings Through Analysis on Financial Report

• Main Authors: Mei-Hsiu, Lin, 林美秀
• Other Authors: Wen-Liang, Hsieh
• Format: Others
• Language: zh-TW
• Published: 2004
• Online Access: http://ndltd.ncl.edu.tw/handle/12106846236614077203

碩士 === 淡江大學 === 國際貿易學系碩士在職專班 === 92 === Given concerns for the aim to improve the competitiveness of our nation’s financial industry, as well as to remedy various bottlenecks that exist in our finance system, the government has enacted by sequence, over the past 3 years since 2000, significant statues and regulations related to the financial industry including ‘Law Governing Merger of Financial Institutions’, ‘Corporate Laws For Financial Holding Companies’, ‘Statue for the Securitization of Financial Assets’, as well as ‘Articles of Association for Financial Supervisory and Management Commission’, through which rules of game for the coming revolutions with domestic financial environment was instilled. Amongst the rules, ‘Corporate Laws For Financial Holding Companies’ has been referred to govern the incorporations of 14 financial holding companies since its inauguration in November of 2001. The number also reflects on the domestic financial market’s high expectation on the potential of establishing financial holding companies to generate economies of scale, operational & market synergy, financial synergy in terms of reduced risk exposure and cost control, management synergy through efficient use of resources, as lastly, synergy with capital efficiency. After a year of operation, the result of financial holding companies as reflected on their financial statements naturally become targets of the public’s attention, providing source of reference for financial holding entities to review its past performance and set forth strategies for future developments. Result of studies have discovered by comparing financial data over 2 fiscal years of 2001 and 2002, that 38 subsidiaries of the 13 financial holdings have experienced declines in their operations and earnings. As for consolidated operational performances from the 2002 fiscal year, no financial holding has yet exhibited noteworthy synergy. Result of operations may only be somewhat identified by comparing the changes with specific financial ratios. Moreover, it is also found that a positive correlation does not necessarily exist between size and performance of financial holdings. For example, large-scale financial holdings including Cathay, Mega, China Development and Fubon should naturally perform given their inherited scale advantages. Nevertheless, mid-sized and small-sized financial holdings like Chinatrust and Taishin, actually delivered a much better earnings scorecards, as they focus on emphasizing their strengths in proactive sales strategies. If looking at financial holdings by comparing their market environment, namely, Taiwan’s market size versus sizes of foreign financial markets, Taiwan’s market seems to become slightly over-saturated with 14 financial holdings. As operational performances vary more and more amongst competitors, possibility is heightened for additional consolidations between existing financial holdings.