Research of Trust and Investment reformed
Date Issued
2006
Date
2006
Author(s)
Chen, Vincent T.C
DOI
zh-TW
Abstract
To meet society’s needs and to respond to increasing demand for mid- and long-term funds arising from the rapid development of Taiwan’s domestic economy, in the 1970’s, the R.O.C. (Taiwan) government approved the establishment of eight Trust and Investment Corporations, including China United Trust and Investment Corporation and China Trust and Investment Corporation. Yet, since then, regulation restrictions and a fast-changing financial environment have made it difficult for Trust and Investment Corporations to expand. Under difficult circumstances, China’s Trust and Investment Corporations are striving to transform or reconstruct.
By now, three out of the eight Trust and Investment Corporations established in the 1970’s, have reformed into commercial banks, another two have become either an industrial bank or a Trust Company, individually, and one has merged with another commercial bank. There are only two Trust and Investment Corporations still operating as established Trust and Investment Corporations in Taiwan - China United Trust and Investment Corporation and Asia Trust and Investment Corporation.
This article utilizes financial analysis methods, selecting several evaluating indicators (such as return on asset), to investigate the operating efficiencies of the Trust and Investment Corporations in Taiwan that have reformed to either a commercial bank, a separate industrial bank or a Trust Company.
The result of this study indicates that the operating efficiencies of these entities, after-transformation, are positively related to the constitution of the corporation before-transformation. However, not many Trust and Investment Corporations have completed this transformation and great variations exist among them. The results of this research provide insufficient evidence to effectively determine which form (either industrial bank or Trust Company) would produce optimum operating efficiencies for existing Trust and Investment Corporations seeking transformation.
This article utilizes China United Trust and Investment Corporation as its research case. After assessing legal limitations, feasibility and potential consequences of three different methods of transformation for China United Trust and Investment Corporation, this article suggests that the Company should transform into a commercial bank in the short term. Until the Company begins to operate profitably, it should plan and develop towards becoming a universal bank over the middle- and long-term.
Subjects
信託投資公司
商業銀行
工業銀行
信託業
中聯信託
Trust & Investment Corp.
Commercial Bank
Industrial Bank
Trust Industry
China Trust and Investment Corporations
Type
other
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