Bank of China Ltd (中國銀行) and Bank of Communications Ltd (交通銀行) have applied to operate savings and loan services in Taiwan, five months after receiving approval from Taiwan’s regulator to upgrade their representative offices into branches here.
“The Financial Supervisory Commission has received applications from the two banks to start branch operations in Taiwan,” the commission said in a statement yesterday.
The two Chinese banks received permission in September 2010 to set up Taiwanese representative offices in Taipei’s Xinyi District (信義). In December last year, they were told by the commission that they could prepare to upgrade their offices into branches, but the two banks did not file formal applications and submit necessary documents until yesterday.
The commission’s statement did not say how long it would take it to complete the review.
A banking bureau official, who declined to be named, said by telephone that it “should not take too long” for the two Chinese lenders to start operations in Taiwan.
The latest move came more than two years after the two sides signed a financial memorandum of understanding (MOU) that allows financial institutions access to each other’s markets.
However, FSC Chairman Chen Yuh-chang (陳裕璋) said in October last year that Chinese banks that have established footholds in Taiwan would be allowed to operate NT dollar-related savings and loan services only after Taiwanese banks in China were given reciprocal treatment.
So far, several Taiwanese lenders such as Chang Hwa Commercial Bank (彰化銀行), First Commercial Bank (第一銀行), Cathay United Bank (國泰世華銀行), Taiwan Cooperative Bank (合作金庫銀行), Hua Nan Commercial Bank (華南銀行) and Land Bank of Taiwan (土地銀行) have opened branches in China.
Last month, Hua Nan Bank became the first and only Taiwanese bank to win approval from China to operate yuan-denominated financial products and services at its branch in Shenzhen, China.
Hua Nan Bank and Mega International Commercial Bank (兆豐商銀) have also gained approval from Chinese authorities to offer yuan-denominated businesses through their offshore banking units.
Separately, Cathay Insurance Co’s (國泰產險) Chinese subsidiary yesterday said it had received approval from the China Insurance Regulatory Commission to start operations at its branch in Sichuan Province, according to a stock exchange filing by parent Cathay Financial Holding Co (國泰金控).
The move is the latest step by the Taiwanese insurance company to expand its business into the western part of China since its first venture into China in September 2008, when it set up a Shanghai subsidiary. It later set up 14 branches in 13 Chinese cities.
This story has been updated since it was first published.