In 2004, the CDICwas entrustedwith the resolution of the Fengshan Credit Cooperative, which
it performed through the full saleof the cooperative.At the time, the competent authority (MOF)
allowed the bid-winning bank to open 10 new branches, six of which could be freely relocated,
as anadministrative incentive.TheChinatrust Bankwon thebid in thepublic tender.
II. KaohsiungBusiness Bank (KBB)
TheCDICwas entrustedas conservator of theKBB inearly2002.The first attempt to sell thebank
as awhole through a public tender faileddue to a lack of investor bids. In order to increase the
transparency, competitiveness, and professionalism of the public tender, the CDIC appointed a
professional financial consultancy to handle affairs regardingmarketing, auction strategy, and
evaluations. The consultancy proposed an innovative strategy, by which the designated NPLs
(i.e. the “BadBank”) and the assets, liabilities, andbusiness operations other than thedesignated
NPLs (i.e. the “GoodBank”)were split and sold separatelyby tender.
Themethodof split tendersalewasadopted in theKBBcaseandmetmarketdemands.This,alongwith
administrativemeasuresprovidedby thecompetent authority toallow the flexible relocationof some
branches,encouraged several investors toparticipate in thecompetitivebid resulting ina successful
auctionatahighprice.TheBadBankwassoldby tender toanassetmanagementcompanyonOctober
27, 2003, and theGoodBankwas assumedby theE.SunBankonSeptember 4, 2004.
III. Chung ShingBank (CSB)
TheCDIC appointed a financial consultancy to arrange the tender saleof theChung ShingBank
through separate tenders for the Bad Bank andGood Bank. The Bad Bank was auctioned off in
two tenders in December 2003 andMarch 2004. TheGood Bank, excluding financial interbank
deposits and call loans, was sold by tender to the Union Bank of Taiwan (UBT) on December
2004, and theassumptionwas completedonMarch19, 2005.
TheCDICusedall funds from theUBT’swinningbidofNT$7.108billion to repay the financial interbank
depositsandcall loansnotsold in the tender, leavingNT$57billion inunpaid financial interbankdeposits.
InMay2005,anamendment to theFinancialRestructuringFundStatuteprovidingnewsourcesof revenue
wasapprovedby theLegislativeYuan.After theFSCmadewrittennotification to theLegislativeYuanon
August16,2005, theFinancialRestructuringFundcompletedcompensation fordepositsprincipal and
interest to29 financial institutions.
IV. EnterpriseBank of Hualien (EBH)
The CDIC arranged the sale of the EBH as a whole by open tender on May 31, 2007. The
Chinatrust Commercial Bank submitted the winning bid and the sale was completed on
September 8, 2007.
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ReviewandOutlook
