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FSC warns on data transfer following Hsinchu takeover

The Financial Supervisory Commission yesterday approved Hsinchu International Bank (新竹國際商銀) taking over Standard Chartered Bank's operations and assets in Taiwan.

The regulator warned the bank regarding the use of local customer credit information, and banned such information from being shared with the parent Standard Chartered.

On June 30, the Taipei branch of Standard Chartered Bank will transfer its operations and assets in Taiwan to the Hsinchu lender to increase the bank's number of outlets to 85 and its assets to NT$571.7 billion (US$17.28 billion), the commission said.

The merged bank will increase its capital by NT$8.5 billion to bring its book value to NT$24 billion from NT$15.1 billion, ranking it the 18th largest bank in the nation.

On July 2, the Hsinchu lender will be renamed Standard Chartered Bank (Taiwan), becoming the British banking giant's wholly owned subsidiary.

Standard Chartered will retain its foreign branch license to continue its lending to large enterprises, while the subsidiary bank will focus more on small and medium enterprise business as well as the consumer segment, the commission said.

As local lenders were worried that foreign lenders would get increased access to Taiwanese corporate customers by obtaining credit records through their local subsidiaries, the financial watchdog said there is to be no sharing of customer credit information between Standard Chartered's subsidiary and its foreign-licensed branch.

"We will require sufficient protection and prudent use of customer data, as the local affiliate and branch remain two different legal entities," FSC spokesperson Susan Chang (張秀蓮) said.
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