Cathay United Bank (國泰世華銀行) said yesterday it had won approval from China to conduct yuan-based business with Taiwanese-invested companies.
The banking arm of Cathay Financial Holding Co (國泰金控), which upgraded its representative office in Shanghai to a branch in October 2010, said in a statement that it received the approval from the China Banking Regulatory Commission (CBRC) on Friday.
The announcement made Cathay United the second Taiwanese lender to offer yuan-based financial services to China-based Taiwanese firms after Hua Nan Commercial Bank (華南銀行), which in May began offering yuan-denominated financial products and services at its Shenzhen branch.
Thus far, 10 Taiwanese banks have opened branches in China and some of them are qualified to conduct yuan business with China-based Taiwanese firms through their branches as they have recorded a profit for a full fiscal year.
However, only Hua Nan and Cathay United have received licenses to do so.
As of June 30, Cathay United’s Shanghai branch reported pretax income of US$4.45 million, compared with US$2.79 million for the whole of last year, acccording to the bank.
The Shanghai branch, which has working capital of 1 billion yuan (US$158.5 million), plans to apply to the CBRC next year to expand its yuan-based business to individuals in China and hopes to make the service available to all businesses there rather than just Taiwanese-invested firms, the statement said.
In addition, the Taipei-based lender said it aimed to increase the scope of its cross-border financial services and open more Chinese branches to better serve Taiwanese businesses there, according to the statement.
Separately, Fubon Financial Holding Co (富邦金控) yesterday declined to comment on local media reports that it is close to a deal to acquire a majority share in First Sino Bank (華一銀行) to accelerate its business expansion in China.
Chinese-language newspapers the Commercial Times, the Economic Daily News and the United Daily News all ran what was essentially the same front-page story that Fubon Financial might beat rival Mega Financial Holding Co (兆豐金控) to gain control of China’s First Sino Bank by acquiring a 51 percent stake for up to NT$20 billion (US$681 million).
Major shareholders of First Sino Bank include Shanghai Pudong Development Bank (浦東銀行), which holds a 30 percent share, Lotus Worldwide Ltd (蓮花國際), which was mainly invested by Taiwanese footwear products maker Pou Chen Group (寶成集團), which holds 60 percent of the shares, and Hong Kong-based Wing Hang Bank Ltd (永亨銀行), with a shareholding of about 5 percent.
The reports said Pou Chen Group plans to sell all of its shareholding in First Sino Bank to Fubon Financial, a claim the Taiwanese firm denied in a filing to the Taiwan Stock Exchange yesterday.