Waterland Financial Holdings Chairman Chang Chao-shun said the company is ultimately headed toward consolidation, arguing its paid-in capital and net worth are too small for it to remain independent over the long term. Speaking at a public hearing of Taiwan's Legislative Yuan Finance Committee on the 12th, Chang said the immediate priority is not a rushed deal but a cleanup of corporate governance and operations so the group is seen as an attractive merger partner rather than, in his words, a "rotten apple." Chang said Waterland Financial has paid-in capital of about NT$33.6 billion and net worth of roughly NT$45 billion, with more than NT$6 billion invested in a pure online bank, leaving limited capital available for other uses. Even so, he said annualized return on equity (ROE, a profitability measure against shareholder capital) for the first half reached 11.5%, which he described as respectable among public-sector banks. The hearing centered on consolidation among quasi-public financial institutions after controversy tied to a recent shift in Waterland Financial's management. Chang said outside scrutiny intensified after the public sector won a majority of eight board seats through proxy solicitation and strategic alliances in the latest election. He argued it was unfair for the market to immediately apply full public-sector standards, while saying he accepted the need for oversight and needed time to reduce internal friction, strengthen corporate governance and improve performance. On compensation, Legislator Lai Shih-bao said Waterland Financial, as a quasi-public bank, should cut senior executive pay to levels comparable with other public-sector banks unless the Ministry of Finance raises the broader salary framework. Chang said he was willing to lower his own pay to quasi-public-sector standards, but opposed across-the-board cuts for staff, saying compensation should remain tied to contribution and performance. He added that the board would rationally review both the pay structure and the necessity of the vice chairman role. Chang Hwa Bank, which the market has named as a possible merger partner, did not endorse the speculation. Chairman Hu Kuang-hua said he could not comment on rumors, but the bank would remain open and prudent toward anything that improves competitiveness and shareholder equity, while avoiding discussion of matters without clarity or concrete progress.