Fri, Jun 09, 2017 - Page 12 News List

Bank of Taiwan to open offices in US, Philippines

US CHALLENGE:While its domestic peers are pulling out of the US because of compliance costs, the state-run lender believes it is still a lucrative market

By Ted Chen  /  Staff reporter

The Financial Supervisory Commission yesterday approved Bank of Taiwan’s (臺灣銀行) applications to open representative offices in California’s Silicon Valley and in the Philippines.

The state-run lender’s move runs counter to its privately owned peers, which began pulling out of the US market last year in anticipation of rising compliance costs, after New York regulators levied a heavy fine of US$180 million on state-run Mega International Commercial Bank (兆豐銀行) for violating money-laundering regulations.

“The US market remains an important market in terms of companies’ global strategy, despite stringent financial regulations such as the Dodd–Frank Wall Street Reform and Consumer Protection Act,” Banking Bureau Deputy Director-General Lu Hui-jung (呂蕙容) said. “For some companies, compliance is regarded as a one-time cost that can be absorbed by continued earnings in the lucrative US market.”

Last year, domestic banks saw profit contribution from the US tumble to NT$4.2 billion (US$139.51 million) as a result of the fine, ranking far behind the NT$21.4 billion in profit contribution from Hong Kong, followed by NT$5.1 billion from Japan and NT$4.3 billion from Singapore, data from the commission showed.

Last year, Taipei Fubon Commercial Bank (台北富邦銀行), Cathay United Bank (國泰世華銀行) and Bank SinoPac (永豐銀行) wound down their US-based operations, while Taishin International Bank (台新銀行) scuttled plans to set up a foothold in the country.

Currently, 12 Taiwanese banks have a combined 23 branches and four subsidiary banks in New York, Los Angeles, Seattle, Guam and Chicago, the commission said.

Bank of Taiwan and Mega Bank are the only local banks that have representative offices in Silicon Valley, it said.

For Taiwanese banks, profit contributions from the Philippines totaled NT$160 million last year, where six domestic banks have established two subsidiary banks and four branches in the Southeast Asian nation, it added.

Separately, ANZ Bank (Taiwan) Ltd (澳盛台灣商業銀行) yesterday denied that the recent resignation and retirement of three of its top executives was part of a plan to withdraw from the Taiwanese market.

ANZ said the personnel changes were normal, adding that it had no plans to pull out of Taiwan.

The speculations emerged after the bank on Wednesday announced that Alistair Bulloch had resigned as chairman, while board member Terry King (經天瑞) had retired, effective Thursday last week.

The announcement followed the retirement early last month of another board member, Chen Fu-lan (陳富蘭), which means three of the seven seats on the ANZ board are now vacant.

However, ANZ said that when the board meets on Friday next week, it would appoint Liu Hung-jui (劉宏瑞) as its new chairman.

ANZ’s retail banking and wealth management businesses, as well as 10 of its branches in Taiwan, are due to be transferred to Singapore-based DBS Bank in October, but ANZ said it would maintain a head office in Taipei and a branch in Taichung.

Additional reporting by CNA

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