The Financial Supervisory Commission (FSC) said yesterday it would consider allowing local financial firms to invest in China’s finance leasing companies.
Banking Bureau Director-General Kuei Hsien-nung (桂先農) made the announcement after a meeting between Financial Supervisory Chairman Chen Yuh-chang (陳裕璋) and executives from about 20 financial firms to discuss investment in China.
Kuei said the commission would place the issue on the agenda of its weekly committee meeting today.
If all proceeds smoothly, subsidiaries of local banks and financial holding firms may soon be allowed to make the move, Kuei said.
Financial Supervisory Commission Vice Chairman Wu Tang-chieh (吳當傑) said the commission would also consider easing other cross-strait banking rules and promote other changes that do not require legal revisions.
Local lenders have urged the government to allow them to open subsidiaries, instead of branches, in China, and to own a stake in more than a single Chinese peer.
Chairpersons from Chinatrust Financial Holding Co (中信金控), SinoPac Financial Holding Co (永豐金控), Shin Kong Financial Holding Co (新光金控) and Taiwan Industrial Bank (台灣工業銀行) said in a joint statement yesterday morning that they could not compete with their foreign counterparts in the Chinese market because of these restrictions.
A bank branch cannot conduct yuan trading or process loans of less than 1 million Chinese yuan (US$147,100), among other financial services that offer better profitability, the statement said.
“Various kinds of limitations severely weaken local lenders’ abilities to take advantage of China’s booming consumer market and other banking business opportunities,” the statement said.
It added that major foreign banks have, since 2006, set up subsidiaries in China and are aggressively strengthening their presence there.
Wu said that as this involves talks with China, the commission would conduct a detailed study when planning the next round of talks with Beijing.
The financial firms also urged the commission to raise China-bound banking investment ceilings, which are currently capped at 10 percent and 15 percent of the net worth of local financial holding companies and banks respectively.
The lenders did not recommend a new ceiling, Wu said.