Taiwan Cooperative Bank (合作金庫銀行) yesterday announced a joint venture with BNP Paribas to tap into the fund management business, paving the way for its transition into a full-fledged financial holding company.
Taiwan Cooperative Bank will hold a 51 percent stake in the newly formed BNP Paribas TCB Asset Management Co (合庫巴黎證券投資信託), while BNP Paribas Investment Partners will hold the remaining 49 percent.
The joint venture has a capital of NT$300 million (US$9.1 million).
This is the bank’s second partnership with BNP Paribas; last year, the two established a joint-venture insurance company that will start operating in March.
Taiwan Cooperative Bank is also considering spinning off its securities unit into a wholly owned company sometime this year, said executive vice president John Chou (周叔璋).
By expanding into insurance and fund management businesses and possibly establishing a securities brokerage arm, the bank is aiming to become a full-fledged financial holding company offering diversified financial products and services.
“We are studying the feasibility of transforming the company into a financial holding firm,” he told reporters during a signing ceremony for the joint venture.
BNP Paribas TCB Asset Management is expected to be the first fund management firm to launch in Taiwan in five years, if it gains approval from the Financial Supervisory Commission.
The commission has in the past regulated the formation of new fund management companies because of overheated competition.
There are currently more than 40 fund management firms in Taiwan and the new alliance will be competing with global players, including UBS, Goldman Sachs and the fund units of ING and JPMorgan, in Taiwan’s NT$4 trillion onshore and offshore fund markets.
“Taiwan is an important fund management market in Asia,” said Olivier Rousselet, country manager of BNP Paribas. “It is the fourth largest in the region and we want to capitalize on that.”
The venture will leverage off Taiwan Cooperative Bank’s nationwide network, which has the highest number of branches at 300, he said.
Asia is the first region that recovered from the global financial crisis and its momentum is going to continue in the years ahead, Rousselet added.
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