Thu, Nov 04, 2004 - Page 10 News List

Bank of Asia will sell Fubon products

BLOOMBERG

International Bank of Asia (港基銀行), a Hong Kong-based lender 75 percent owned by Fubon Financial Holdings Co (富邦金控), will start selling the Taiwan company's insurance products, it said in a statement.

Fubon bought the stake in International Bank in March for HK$3.24 billion (US$416 million), becoming the first lender from Taiwan to operate a branch network in Hong Kong. China only allows Taiwanese banks to open representative offices.

International Bank is betting that the Closer Economic Partnership Agreement, which in June dropped the minimum assets Hong Kong- registered lenders need to open a branch in China to US$6 billion from US$20 billion, will give it an edge over foreign banks. That edge may be dulled by the end of next year, when China lifts some curbs on foreign lenders.

International Bank of Asia plans to open its first representative office in southern China this year, said Chief Executive Officer Lee Jin-yi (李晉頤).

When China joined the World Trade Organization in December 2001, it agreed to lift curbs by 2006 that prevent overseas banks from conducting retail business in China's currency, the yuan.

Foreign lenders are currently allowed to open one branch a year with assets of US$20 billion. That rule was relaxed in September to allow multiple openings in a 12-month period, the China Banking Regulatory Commission said.

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