Who Will Acquire First Financial Holding? Ministry of Finance Makes First Statement: Supports Governance Reform, Compensation Review, and Merger Evaluation

After public-sector shareholders secured controlling interest in First Financial Holding (2889-TW), market attention has focused on subsequent reforms and integration plans. Today (14th), the Ministry of Finance clearly stated for the first time that public enterprises' investment in and acquisition of control over First Financial Holding aims to strengthen corporate governance, protect shareholder rights, resolve long-standing management disputes, and restore the company to stable operations. Going forward, the Ministry will guide all public-sector entities to continue advancing institutional reforms at First Financial Holding, including reviewing executive compensation for the board and CEO, and reaffirming three merger principles—evaluating potential integration with other financial institutions as part of its strategic direction.

The Ministry noted that amid increasingly fierce competition in financial markets, it has long encouraged public financial institutions to proactively seek suitable external targets and assess the feasibility of acquisitions to expand business scale and operational reach through complementary strengths and resource integration, thereby enhancing competitiveness and strengthening organizational resilience. Should integration be considered in the future, it will proceed according to the three principles of "respecting market mechanisms," "stakeholder consensus," and "synergy prioritization," ensuring that public-sector control and policy-driven missions remain unaffected.

Regarding recent concerns over executive compensation at First Financial Holding, the Ministry explicitly expressed support for a review. The Ministry stated that First Bank recently issued a public statement urging its nominated directors to initiate a reasonableness assessment of executive pay structures at First Financial Holding and its subsidiaries and affiliated companies through the company’s board of directors, aiming to continuously improve corporate governance and safeguard shareholder rights. The Ministry supports this initiative and will direct directors appointed by public-sector financial institutions to jointly fulfill their managerial responsibilities and assist in advancing related reforms.

Indeed, governance and integration issues surrounding First Financial Holding have become focal points in the Legislative Yuan's Finance Committee this week. During a public hearing held on the 12th, multiple legislators inquired about the progress of reforms and future development directions following public-sector control, demanding that the Ministry present more concrete plans regarding merger feasibility, corporate governance, and operating performance.

One key market concern centers on whether First Financial Holding will be incorporated into the broader integration of the public financial system. While today’s press release from the Ministry did not name any specific merger counterpart or propose a clear timeline, it formally included "seeking integration with other financial institutions" as part of its reform agenda—effectively leaving room for future merger evaluations.

The Ministry emphasized that the original intent behind public-sector investment and acquisition of control was to help improve the company’s governance structure, enhance operational efficiency, and protect shareholder rights. It will continue guiding relevant public-sector enterprises to advance institutional reforms, widely incorporating feedback from shareholders and stakeholders, and deliberating future development paths under the dual considerations of market mechanisms and operational synergies—to elevate the overall competitiveness of both First Financial Holding and the public financial system.