Chinese banks have expressed an interest in buying into the banking sector, an official with the Financial Supervisory Commission said yesterday as new rules allowing Chinese companies to buy stakes in Taiwanese financial institutions took effect.
“No Chinese banks have applied [to buy a stake],” but some have shown interest, Financial Supervisory Commission Vice Chairwoman Lee Jih-chu (李紀珠) said on the sidelines of an event to launch the Financial Ombudsman Institution.
The financial regulator announced last month that Chinese banks can individually acquire up to 5 percent of a Taiwanese bank or financial holding company, or they can buy a 10 percent stake if joined by Chinese qualified domestic institutional investors.
In order to qualify, the Chinese banks must have had no major violations in the five years prior to filing the application.
They must also be among the world’s 200 largest banks in terms of either capital or assets for one year before applying for the acquisition, be engaged in international banking operations and have a financial structure strong enough to meet regulatory guidelines.
In addition, the commission said applicants must have run a branch for at least five years in a member state of the Organisation of Economic Co-operation and Development, have a solid internal control system and provide full disclosure of their sources of funds.
According to commission regulations, a qualified Chinese bank can enter the banking market by opening a branch or purchasing a stake in a local bank, but it cannot do both.