Sat, Mar 30, 2013 - Page 13 News List

Cross-strait banking talks planned

EYEING CHINA:Seven Taiwanese lenders are awaiting regulatory approval to expand their operations in China, where the lending market generated considerable profits last year

By Crystal Hsu  /  Staff reporter

Taiwanese banking regulators are to meet with their Chinese counterparts in Taipei on Monday for talks on easing market access rules for bilateral financial institutions, the Financial Supervisory Commission (FSC) said yesterday.

China’s Banking Regulatory Commission Chairman Shang Fulin (尚福林) and his colleagues will arrive in Taipei tomorrow to join the third round of cross-strait banking talks with FSC Chairman Cheng Yuh-chang (陳裕璋) on Monday, the commission said.

The two sides will consider allowing their banks to own a larger stake in peers across the Taiwan Strait so that they can forge more meaningful partnerships, Banking Bureau Deputy Director-General Jean Chiu (邱淑貞) said.

Currently, individual Chinese banks can only own a 5 percent stake in their Taiwanese peers and together the investments may not exceed 10 percent, while Taiwanese banks can buy up to a 20 percent stake in Chinese lenders.

“Both sides will raise the limits significantly this time,” Chiu said by telephone, as Taiwan and China cautiously deepen cross-strait banking ties on concerns over political implications.

To date, no Chinese bank has filed an application to invest in a Taiwanese peer and the 5 percent restriction is widely seen as the main culprit.

The two sides will also mull ditching requirements that banks must have five years of prior operational experience in advanced markets to qualify to set up branches across the Taiwan Strait, Chiu said.

The planned deregulation would enable Taiwanese lenders, such as Taishin International Bank (台新銀行) and Far Eastern International Bank (遠東銀行), to enter the Chinese market.

In addition, the commission will ask Chinese banking authorities to facilitate a review of attempts by Taiwanese lenders to set up second branches or outlets in China, Chiu said.

Seven domestic lenders are awaiting Chinese regulatory approval to expand their banking operations in China, where lending operations generated considerable profits last year due to higher interest margins.

State-run First Commercial Bank (第一銀行), Taiwan Cooperative Bank (合庫銀) and Hua Nan Commercial Bank (華南銀) are seeking to open new branches in Chengdu, Tianjing and Shanghai respectively.

Cathay United Bank (國泰世華銀行) is awaiting the go-ahead for a branch in Qindao and Bank SinoPac (永豐銀) for a subsidiary in Nanjing.

As a goodwill gesture, Taiwanese regulators on Tuesday approved plans by China’s Construction Bank Corp (中國建設銀行) to upgrade its representative office in Taipei to a branch and Chinese regulators gave the green light for Taiwan Business Bank (台企銀) to set up a branch in Shanghai.

The Chinese delegation is scheduled to leave on Tuesday.

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