Wed, Jul 11, 2012 - Page 14 News List

Bank of Taiwan hoping to expand from Shanghai

STAFF WRITER, WITH CNA, SHANGHAI

The Bank of Taiwan (台灣銀行) will use Shanghai as a “beachhead” to tap into other cities in China, bank chairwoman Susan Chang (張秀蓮) said, as she opened the bank’s branch in China’s financial hub.

Chang said other cities being considered for expansion include Chengdu or Chongqing in western China, and cities in the Pearl River and Yangtze River deltas and the Bohai Economic Rim.

The bank is also thinking of converting the Shanghai branch into a subsidiary, she said.

Bank sources said that foreign bank branches face many restrictions imposed by Chinese authorities, but a subsidiary could operate a wider range of businesses, including handling deposits and loans for Chinese customers.

Chang said the three years it took for Bank of Taiwan’s representative office in Shanghai to become a branch might have seemed like a long time, but it was actually expedited because of the “early harvest” program under the cross-strait Economic Cooperation Framework Agreement (ECFA).

She said Taiwanese businesspeople would be the branch’s focus in the initial stage, but it hopes to expand to serve local companies, especially small and medium-sized enterprises.

In its first year, the Shanghai branch will only be authorized to undertake foreign currency services — such as personal and corporate foreign currency deposits, foreign currency credit, trade financing and foreign exchange operations — that mainly cater to the foreign trade needs of Taiwanese businesspeople based there.

If the bank shows a profit after the first year, it will then be able to offer Taiwanese businesspeople yuan-related services. After posting a profit for a second year, it can open yuan-denominated services to all customers.

Asked about progress on a cross-strait currency settlement mechanism, Chang said it would depend on cross-strait negotiations.

However, Bank of Taiwan has substantial experience in issuing currencies and has a strong interest in serving as a “settlement bank,” she said.

This story has been viewed 3311 times.
TOP top