Chinatrust Financial Holding Co (中信金控), the nation’s third largest financial services provider by assets, yesterday opened a capital leasing unit in Shanghai, allowing the conglomerate immediate access to yuan-based lending operations to boost overall earnings.
The new unit, CTCB Leasing Co (仲信國際租賃公司), came five months after the banking arm, Chinatrust Commercial Bank (中信商銀), set up a branch in the same city in April, as the group seeks to expand operations in Greater China.
“The new unit allows Chinatrust Financial to conduct yuan-based businesses and falls in line with China’s plans to develop the private economy and support small and medium enterprises with the help of capital leasing firms,” Chinatrust Bank vice chairman Hsueh Hsiang-chuan (薛香川) said while attending a ceremony in China.
The banking branch in Shanghai has to prove profitable one year after its establishment to qualify for applying to offer yuan-denominated services.
CTCB, with registered capital of 310 million yuan (US$49 million), yesterday won contracts worth 36 million yuan from 10 customers, the statement said.
The new company is to offer direct and indirect capital leasing services and join forces with the banking branch in meeting loan demand from small and medium Taiwanese manufacturers based in China, Hsueh said.
Charles Lo (羅聯福), chief executive of Chinatrust Financial’s China business, said the group aims to upgrade its Shanghai branch into a subsidiary and establish a second branch as well as sub-branches.
Chinatrust Financial has appointed Mark Shieh (謝明鑫) as CTCB chairman and Otto Lin as chief executive.
“There is ample room for CTCB to grow in terms of business as penetration rates of capital leasing firms average 10 percent in Europe and the US, but currently stand at 4 percent in China,” Lin said.
CTCB plans to take advantage of Chinatrust Bank’s international service network to help customers strengthen global competitiveness and cut costs, Lin said.
In addition, CTCB has hired an external agency to appraise collateral so it may improve risk management and maintain smooth and stable liquidity flows, Lin said.
Shares in Chinatrust Financial picked up 2.15 percent to NT$19 at close of trade yesterday, outperforming the TAIEX’s 0.31 percent rise, data showed.