First Commercial, Wing Hang team up for China

Wing Hang Bank Ltd (永亨銀行), which is 20-percent owned by Bank of New York Co, plans to offer joint banking services in China with First Commercial Bank (第一銀行), Taiwan's fourth-biggest lender by assets.

The alliance announced on Friday will target customers in China's Pearl River Delta, Yangtze River and Bo Hai Bay areas, Wing Hang, Hong Kong's sixth-largest bank by assets, said in a statement.

Wing Hang expects the alliance will generate more business referrals between the two banks, said chief executive Patrick Fung (馮鈺斌). Fung didn't detail what kinds of services the firms will jointly offer.

First Commercial is the second Taiwanese bank this year to form a relationship with a Hong Kong-based bank in order to gain access to China. Banks from Taiwan are restricted to having representative offices in China that aren't permitted to do banking business.

Overseas banks want to tap financial markets in China, where the economy expanded a faster-than-expected 9.7 percent in the first quarter.

Wing Hang last month said it plans to upgrade its Shanghai representative office to a branch and open a representative office in Beijing this year. It already has an office in Guangzhou and a branch in Shenzhen.

Fubon Financial Holding Co (富邦金控), Taiwan's second-largest financial services company by market value, last month completed its purchase of a majority stake in Hong Kong's International Bank of Asia (港基銀行), the first takeover of a Hong Kong bank by a Taiwanese lender.

Taiwanese companies had business worth US$4.59 billion in China last year.

The International Bank of Asia will start operations in China by next month, thereby becoming the first Taiwanese-controlled bank operating in China, a Chinese-language newspaper reported on Friday, citing Jesse Ding (丁予康), a Fubon Financial board member.

International Bank of Asia, which has no branches in China, may seek a partnership with a Hong Kong- or China-based rival that has China operations, the report said.

Beijing agreed to offer easier access to China for banks from Hong Kong last June.

Under the agreement, the assets threshold for Hong Kong banks wanting to do business in China was cut to US$6 billion, compared with US$20 billion for overseas banks.