The government is preparing for Chinese banks to acquire stakes in local banks, but there is not a timetable for implementation, Financial Supervisory Commission (FSC) Chairman Chen Yuh-chang (陳裕璋) said yesterday.
Chen was responding to media reports that the commission already passed such an initiative last week, which was waiting for final approval by the Executive Yuan. Newspaper reports said the new measure would facilitate strategic cooperation between Taiwanese and Chinese banks.
Chen told reporters before attending a legislative session that the commission was planning to allow Chinese banks to invest in their local counterparts.
“However, the commission did not address the issue last week as reported, nor has it submitted such a proposal to the Executive Yuan for approval,” Chen said.
According to the statute governing cross-strait financial exchanges and investment, an individual Chinese bank is not allowed to hold more than a 5 percent stake in a single Taiwanese financial institution. Chinese banks and qualified domestic institutional investors are also not allowed to own more than an aggregate 10 percent share in a single Taiwanese financial institution. The statute authorizes the commission to decide when Chinese banks can begin to buy into local banks.
During a Finance Committee meeting yesterday, Chinese Nationalist Party (KMT) Legislator Lai Shyh-bao (賴士葆) asked Chen whether Cathay United Bank (國泰世華銀行), the banking arm of Cathay Financial Holding Co (國泰金控), would buy a 5 percent stake in the Bank of Wenzhou (溫州銀行) in China through its branch in Shanghai, as the Chinese-language Commercial Times has reported.
Chen said the commission had not yet received any application for such a plan, while Cathay Financial said in a statement to the Taiwan Stock Exchange that the newspaper report was “only rumor and speculation.”