The Financial Supervisory Commission has received applications from Bank of China (中國銀行) and Bank of Communication (交通銀行) to set up representative offices in Taiwan, the commission said yesterday.
The applications came after Taiwan agreed to open the nation’s banking market to Chinese lenders following the signing of the Economic Cooperation Framework Agreement (ECFA) with China in late June. The trade pact also allows Taiwanese banks to set up branches in the Chinese market.
Bank of China has assets worth more than 9.72 trillion yuan (US$1.43 trillion), earning it a place in the Fortune Global 500 for the past 17 years. It is the second-largest lender in China after the Industrial and Commerical Bank of China (中國工商銀行) and it outperforms other Chinese peers in terms of non-institutional and foreign exchange financing.
The Bank of Communications, the fifth largest commercial lender in China, reported assets worth 3.71 trillion yuan as of June 30, climbing up one notch in the Fortune Global 500 list from 494th last year to 440th in terms of operational revenue this year.
Lin Tung-liang (林棟樑), deputy director of the commission’s Banking Bureau, said the commission would consult the central bank and cross-strait banking rules before reaching a decision on the applications.
The commission official declined to remark on the length of time required for the applications, but added there is not much the two Chinese lenders can do other than gather business reports at representative offices.
The commission also refused to comment on reports that US insurance giant American International Group Inc (AIG) would pay a visit to discuss the fate of its Taiwanese unit, Nan Shan Insurance Co (南山人壽). Chinatrust Financial Holding Co (中信金控) earlier expressed a strong interest to buy Nan Shan to help the company tap into the life insurance business.
Joanne Tzeng (曾玉瓊), deputy director-general of the commission’s Insurance Bureau, dismissed reports that AIG officials would come to Taiwan for talks in the coming days.
“I don’t know anything about AIG’s intentions,” Tzeng said.
The commission has urged the US group to keep Nan Shan and promised to help solve its financial woes and protect the rights of employees and policyholders.
The Ministry of Economic Affairs on Aug. 31 rejected the transfer of AIG’s 97.57 percent stake in Nan Shan to a prospective buyer group — China Strategic Holdings Ltd (中策集團) and Primus Financial Holdings Ltd (博智金融) — on grounds that the consortium had insufficient funding for future capital increase needs or long-term commitment to operate Nan Shan.
China Strategic said on Monday that AIG has indicated it would be in the best interests of the parties to terminate the share purchase agreement and that it received the rejection from the economics ministry.
In related development, a separate FSC statement showed total revenues for Taiwan’s listed companies rising 39.75 percent year-on-year to NT$8.75 trillion (US$274 billion) in the first half of the year on reviving business activity.
The nation has 1,300 listed firms as of Aug. 31, whose aggregate pre-tax profit amounted to NT$839.9 billion for the first six months, more than double the level of a year earlier, the commission said.