The Financial Supervisory Commission said yesterday that the government will consider lifting a ban on new bank branches as some financial holding companies have urged.
"It is a major issue and we need to seriously consider it," commission Chairman Kong Jaw-sheng (龔照勝) told reporters yesterday after a Merrill Lynch investment forum entitled "Financial Landscape."
Kong did not identify which companies have asked the commission for the repeal.
But he stressed that it will be at least two or three months before the commission begins to discuss the issue.
The financial regulator has not allowed new branches to be established for the last five years because it wants to encourage further consolidation within the highly fragmented banking sector.
The ban created a sellers' market which the regulator had not foreseen when it implemented the policy, an analyst said.
The top five banks accounted for only 36 percent of total banking assets as of the end of last September, according to Taiwan Ratings Corp's (
"Increasingly expensive acquisition prices, as a result of a stable economic environment and a government ban on the establishment of new branch offices, have created a sellers' market and discouraged buying interest," Taiwan Ratings analyst Susan Chu (
During yesterday's conference, Kong also expressed concern that Taiwanese banks have expanded faster than their peers.
For every 10,000 people, there are 2.75 branches, compared with an average of 1.95 globally and 1.9 in Hong Kong, he said.
"Scale is important as it will boost a bank's competitiveness," Kong told investors.
"We hope there will be one to three Taiwanese banks with the ability to compete in the Asian region within three years," the FSC chairman said.
Taiwan also wants to establish itself as a regional center for fund raising and asset-management companies, Kong said.
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