Fri, Sep 24, 2010 - Page 12 News List

FSC approves two office applications by Chinese lenders

By Crystal Hsu  /  STAFF REPORTER

The Financial Supervisory Commission (FSC) yesterday approved applications from two Chinese lenders to set up representative offices in Taiwan, allowing them to conduct research, information gathering and other non-profit-making activities.

The approval came a week after China allowed four Taiwanese banks to open branches, in line with the Economic Cooperation Framework Agreement (ECFA) signed in June to ease market access restrictions on the banking sector.

“The commission gave its go-ahead to the plans of Bank of China (中國銀行) and Bank of Communications (交通銀行) to establish representative offices in Taiwan,” said Jean Chiu (邱淑貞), deputy director-general of the FSC’s banking bureau.

Under the ECFA, Chinese lenders may apply to have their representative offices upgraded to a branch after a year, but may not turn them into subsidiaries.

By contrast, Taiwanese banks are allowed to expand in China in one of three ways — setting up branches, setting up subsidiaries or buying a stake in a Chinese lender.

Bank of China has assets of 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 Commercial Bank of China (中國工商銀行), while the Bank of Communications is the fifth-largest commercial lender in China, with assets of 3.71 trillion yuan as of June 30.

The two Chinese banks plan to set up their representative offices in Taipei’s Xinyi District (信義) and they plan to hire about 10 staffers, the commission said.

Last week, Land Bank of Taiwan (土地銀行), Chang Hwa Commercial Bank (彰化銀行), First Commercial Bank (第一銀行) and Taiwan Cooperative Bank (合庫銀行) won Chinese regulatory approval to open branches in China, while Cathay United Bank (國泰世華銀行), Hua Nan Commercial Bank (華南銀行) and Chinatrust Financial Holding Co (中信金控) are still awaiting Beijing’s review of their cross-strait expansion plans.

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