Feasibility of Non-Financial Holding Company Merger-A Case Study of TC Bank As the Acquiring Bank

• Main Authors: Jui-Chien Chen, 陳睿謙
• Other Authors: Wen-Cheng Hsiao
• Format: Others
• Language: zh-TW
• Published: 2010
• Online Access: http://ndltd.ncl.edu.tw/handle/91729745728535388302

碩士 === 銘傳大學 === 管理學院高階經理碩士學程 === 98 === The evolution in the Taiwan financial industry through Financial Holding Company Act results in cooperation synergies in banking, securities, and insurance institutions. The fact of established financial holding companies increases competitive pressure on non-financial holding company’s banks. For regional small and medium sized banks mergers and acquisitions (M&A) are the most effective options for rapid expand branches and pursuit the economies scale. Therefore, the research objective is to explore the feasibility of Ta Chong Bank as a buyer on acquisitions of listed non-financial holding banks. This study provides comprehensive recommendations to TC Bank based on the evidence of simulation of financial performance and risk evaluation. The data are collected from TEJ database with 20 quarterly financial reports from December 2004 to September 2009. With the model provided by Boyd, Graham, and Hewitt, the study analyzes ROE and ROA as well as the standard deviation of risk value Zi, ROE, and ROA. Furthermore, the study simulates assets of other 10 non-financial holding banks under consideration of M&A targets to TC Bank. The description of financial backgrounds of TC Bank and the ten banks also provides additional information for judging the correctness of M&A portfolio. The results indicate that Taiwan Cooperative Bank, Kings Town Bank, Bank of Kaohsiung and Far Eastern International Bank are the best four alternatives for TC Bank. The main reasons were higher merged ROE and ROA, and lower risk values as well as standard deviation. After considering sizes of assets and other financial and non-financial factors, Kings Town Bank and Bank of Kaohsiung will be the final possible merge targets for TC Bank.