The nation’s leading financial institutions have made tremendous progress since the launch of a government initiative to encourage these institutions to tap into the vast Southeast Asian markets two years ago, Financial Supervisory Commission (FSC) Chairman William Tseng (曾銘宗) said yesterday.
ASEAN markets serve as important alternatives to China, as the nation’s leading financial companies seek to diversify and expand their presence abroad, Tseng said at a forum in Taipei, which was organized by the Chinese-language CommonWealth Magazine.
Tseng said these footholds would greatly aid many Taiwanese businesses operating in the region.
“As Taiwanese companies ramp up overseas expansions, diversification and risk management have never been more important,” he added.
As of the end of last year, Taiwanese financial companies had a collective business exposure of US$198.5 billion in Southeast Asia, Tseng said at the forum focusing on emerging business opportunities in the region.
RAPID GROWTH
The local financial sector’s investments across those markets have been growing at 30 percent annually in recent years, with profits last year gaining 20 percent year-on-year to US$1.18 billion, he added.
Regarding financial institutions’ overseas acquisition bids, Tseng said the commission is seeking to ease regulations by allowing companies to invest up to 40 percent of their net worth, instead of the current requirement of up to 40 percent of paid-in capital.
However, companies wishing to become regional champions must have the required fiscal condition, operating scale, regulatory compliance record and risk management capacity, and that the initiative is only intended for qualified companies, he said.
Tseng said that while mergers and acquisitions remain the fastest way for companies to get footholds in markets abroad, less capable financial firms are advised to open offshore branch offices.
Financial companies could see profit contributions from Southeast Asian markets surge significantly in two or three years, he said.
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