Wed, Mar 27, 2019 - Page 12 News List

Standard Chartered to invest in Web-only bank

‘OPPORTUNITY’:Taiwanese do not go to branches as often as before, so they would not have difficulty adapting to virtual banks, the lender’s CEO said

By Kao Shih-ching  /  Staff reporter

Web-only banking would be a good business, as Taiwanese consumers have embraced innovative payment methods, but it might be difficult to forecast how soon such an investment would break even, Standard Chartered Bank Taiwan Ltd (渣打台灣銀行) said yesterday.

The lender said that it would invest NT$500 million (US$16.2 million) for a 5 percent stake in Line Bank (連線商業銀行), a planned Web-only bank initiated by Line Financial Taiwan Corp (台灣連線金融科技), to become the nation’s only foreign bank participating in Web-only banking investment.

“We seized the opportunity, as Standard Chartered Bank as a group values online-only banking, and the branch in Hong Kong is also fighting for a license to launch an online-only retail bank,” chief executive officer Anthony Lin (林遠棟) told a media briefing in Taipei.

Line Bank’s preparatory team would need to compete with Chunghwa Telecom Co’s (中華電信) team for its planned Web-only Next Bank (將來銀行) and another team led by Waterland Financial Holdings Co (國票金控) for two licenses to set up virtual banks in Taiwan.

“The massive volume of Line users will be our biggest strong point, as every Taiwanese uses Line to communicate and connect with others nowadays,” Lin said.

The chief executive said he is confident that local consumers would embrace the online-only banks, even though they are not allowed to establish conventional branches.

“Taiwanese do not go to the branches as often as before, so we do not think they would have much difficulty adapting to the virtual banks,” Lin said.

Although Taiwanese generally prefer cash and are used to withdrawing money from automated teller machines at conventional bank branches, Line Bank would win them over by promoting convenient electronic payments, he said.

Standard Chartered believes that Web-only banking will be a revolutionary service, and a good business as well, he added.

However, compared with Next Bank chief executive officer Liu I-cheng (劉奕成), who told reporters that Next Bank aims to break even within three years, Standard Chartered said that it is difficult to forecast when the virtual bank would begin to turn a profit.

“Projection is full of assumption and could be adjusted at anytime,” Lin said, adding that when the bank could profit would be based on changes in macroeconomic and microeconomic factors.

Standard Chartered saw its net profit rise at a double-digit rate last year, with retail and corporate banking growing, it said.

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