Tue, Oct 24, 2006 - Page 12 News List

Lawmakers worried by `invasion' of foreign banks

By Jackie Lin  /  STAFF REPORTER

Lawmakers yesterday expressed concern about the recent string of foreign financial institutions announcing plans to take over local banks, saying that it was tantamount to a modern version of the invasion mounted by "allied forces of the eight powers."

Standard Chartered Bank has acquired more than 51 percent of the shares of Hsinchu International Bank (新竹國際商銀), while Citibank is rumored to be in buyout talks with Bank of Overseas Chinese (華僑銀行) and HSBC is reportedly interested in the Far Eastern International Bank (遠東商銀).

During the legislature's Finance Committee yesterday morning, Democratic Progressive Party Legislator Gao Jyh-peng (高志鵬) asked financial chiefs whether Taiwan's banks will all fall into the hands of foreign financial institutions within six months as Eastern Multimedia Group (東森多媒體) chairman Gary Wang (王令麟) recently claimed.

Minister of Finance Ho Chih-chin (何志欽) flatly said that would be impossible.

Shih Jun-ji (施俊吉), chairman of the Financial Supervisory Commission, said Taiwanese banks collectively own a net worth of NT$1.7 trillion (US$51.1 billion), a massive amount that meant foreign institutions would find it difficult to raise enough capital for takeover bids. Currently, foreign banks only control 5.63 percent of their local peers, he said.

"The fact that foreign players are willing to invest in Taiwanese banks demonstrates their confidence in Taiwan's financial development. They're welcome here," Shih said.

Lin Wen-lang (林文郎) echoed Gao's comments, saying that foreign capital accounts for more than 30 percent of large-scale financial holding companies.

Chinatrust Financial Holding Co (中信金控) was 53.18 percent controlled by foreign investors. For Cathay Financial Holding Co (國泰金控) and Fubon Financial Holding Co (富邦金控), the ratios were 35.74 percent and 34.92 percent, respectively, he said.

Lin urged the government to keep a close eye on any future developments.

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