Bank SinoPac (永豐銀行), the flagship unit of SinoPac Financial Holding Co (永豐金控), yesterday opened a subsidiary in the Chinese city of Nanjing, allowing the Taiwanese lender to court corporate and individual clients in China.
The new banking subsidiary is the first owned by a Taiwanese lender, as its peers keep branches in China, limiting their services to corporate customers and slowing their pace of expansion in the massive market.
“Having a subsidiary in Nanjing, we enjoy more flexibility when expanding in China, since we can conduct both commercial and retail banking business,” Bank SinoPac said in a statement.
A banking subsidiary can apply to set up branches more quickly and the Taiwanese lender intends to use it as a launchpad to build a financial service network and meet the demand of companies that will benefit from China’s national development plan, SinoPac said.
CTBC Bank (中信銀行), Taiwan’s largest credit-card issuer, planned to set up a subsidiary, but settled for branch offices to avoid delays in expanding in China, senior executives said. The bank is searching for acquisition and investment opportunities to facilitate the process.
Fubon Financial Holding Co (富邦金控) took a different approach by buying a 80 percent stake in Shanghai-based First Sino Bank (華一銀行), which has 14 branches and outlets in first-tier Chinese cities in the Pearl River Delta, the Yangtze River Delta and the Bohai Economic Rim.
In addition to owning a subsidiary bank, Bank SinoPac inked a deal in April last year with Industrial & Commercial Bank of China Ltd (ICBC, 中國工商銀行) to sell 20 percent of its shares to the Chinese peer via a private placement.
However, the venture has stalled because the legislature has yet to approve a proposed cross-strait service trade agreement.
In the meantime, Bank SinoPac is taking advantage of ICBC’s 17,000 outlets to offer remittance, currency exchange and other financial services for customers on both sides of the Taiwan Strait, the statement said.
Earlier this month, SinoPac Financial set up a capital leasing company in Tianjin, China, to capitalize on the loan demand in northern China, the statement said.
At home, Bank SinoPac said it leads its peers in terms of yuan deposits which generate higher yields for customers and the lender.
The bank-focused conglomerate is further looking into tapping into China’s capital market by establishing a securities house with a Chinese partner once the service trade pact is approved.
Meanwhile, state-run First Commercial Bank (第一銀行), the banking arm of First Financial Holding Co (第一金控), has won approval from China to open a sub-branch in Shanghai’s free-trade zone, allowing it to benefit from looser regulations within the zone and improve its operations.
The sub-branch will help the Taiwanese lender deepen its presence in the Chinese city where First Bank has been operating a branch since December 2010, the bank said in a statement yesterday.
The Shanghai branch generated a pre-tax profit of US$10.34 million last year, surging from US$1.02 million in 2012 and outperforming all its Taiwanese peers in the city, the statement added.