Taiwanese banks may soon solicit partners from China to strengthen their capital structure and economic scale after the Financial Supervisory Commission (FSC) yesterday set Jan. 2 as the date for implementation of such alliances.
The FSC announced the date nearly two years after it revised regulations allowing Chinese banks to acquire shares in Taiwanese lenders and financial holding companies, without saying when it would take effect.
“Starting on Jan. 2, Chinese banks may apply to acquire stakes in Taiwanese banks and financial holding companies,” the commission said in a statement on its Web site.
The move came after Financial Supervisory Commission Chairman Chen Yuh-chang (陳裕璋) met with his Chinese counterpart in China last month for talks on deepening cross-strait banking ties.
Individual Chinese lenders may take up to a 5 percent stake in a single Taiwanese bank or financial holding company, and together their shares may not exceed a 10 percent ceiling, the commission said.
The 10 percent cap also applies to investment by Chinese qualified domestic institutional investors, the regulator said.
Chinese shareholders intent on naming board directors and share transfers must obtain permission from the commission first, the FSC said.
The measure will enable the FSC to oversee and regulate Chinese investments effectively, the commission said.
The latest liberalization is expected to boost domestic financial shares that have borne the brunt of corrections triggered by the European sovereign debt crisis, local media said.
Cathay Financial Holding Co (國泰金控), Chinatrust Financial Holding Co (中信金控) and Taishin Financial Holdings Co (台新金控) are expected to benefit from the opening, while state-run financial services providers are still banned from soliciting Chinese investors, local media said.
Small and medium-sized lenders like EnTie Commercial Bank (安泰銀行) and Ta Chong Bank Co (大眾銀行) are likely to benefit because they have voiced interest in cross-strait partnerships, local media said.