Cathay Financial Holding Co (國泰金控) will adopt an insurance--banking “double-engine” strategy in the China market, company president Chen Tsu-pei (陳祖培) said in Shanghai yesterday.
Speaking at the opening of the Shanghai branch of Cathay United Bank (國泰世華銀行), Chen said Cathay Financial has an advantage over its competitors because its insurance arms — Cathay Life Insurance Co (國泰人壽) and Cathay Century Insurance Co (國泰世紀產險) — have already entered China ahead of the banking unit.
“We are expecting a ‘comprehensive profit’ from our integrated deployment of banking, life insurance and property insurance services in China,” Chen said.
Currently, Cathay Life Insurance has branches in nine of China’s provinces and 37 sales outlets, while Cathay Century Insurance maintains branches in four provinces and two sales outlets.
Chen predicted that the bank’s Shanghai branch would break even or make a profit in the first year because as long as its loans reach US$160 million, it will be allowed to operate services in Chinese yuan, and in its third year, it would be qualified to offer full-fledged financial services.
“By then, we will be able to duplicate the ‘double-engine’ insurance/banking business model in China,” Chen said.
Chen said that although Cathay United Bank will soon set up a second branch in China to qualify to form a subsidiary, it will not rush to open more branches.
Rather, Cathay Financial will prioritize the life insurance business by establishing four to five outlets in Chongqing, Chengdu, Shenyang and Fujian Province, Chen said.