Financial Supervisory Commission (FSC) Chairman Wellington Koo (顧立雄) yesterday reiterated that bank executives and board members cannot concurrently serve as directors or supervisors at virtual banks, after Mega International Commercial Bank (兆豐銀行) reportedly protested that it could not appoint its own officials to sit on the board of Next Bank (將來銀行).
Koo said that local and foreign banks with local operations cannot appoint their chairpersons, general managers or ranking managers to sit on the boards of virtual banks in which they invest.
However, financial conglomerates that own the banks could send their directors and general managers to the Web-only banks’ boards, as there is no direct conflict of interest, he said.
Based on Koo’s clarification, Taipei Fubon Commercial Bank (台北富邦銀行), which owns a 25.1 percent stake in Line Bank (連線商業銀行), cannot have its chairman or general manager concurrently work as a director or supervisor at the virtual bank.
However, Line Bank’s board could include Fubon Financial Holding Co (富邦金控) president Jerry Harn (韓蔚廷).
The commission would only allow lenders’ executives to take a seat on the boards of Web-only banks when there is no concern about conflicts of interest, Koo said.
Local bank managers in charge of sections that are not in direct competition with Web-only banks — such as information security, accounting and finance, and legal compliance — would also be allowed to join the boards of virtual banks, Koo added.
In other words, Standard Chartered Bank Taiwan Ltd (渣打台灣銀行), which has invested in Line Bank, could appoint its chief information security officer to sit on the board of the virtual bank, but not its credit card business executives, Koo said.
Regarding Mega Commercial Bank’s complaint that it could not send executives to join the board of Next Bank, Koo said that Mega Financial Holding Co (兆豐金控) could send someone instead.
“We respect Mega Bank’s decisions regardless of whether it is to pull out from its investment. The bank does not need our approval if it wants to exit, but Next Bank will have to apply to us if it is to have new shareholders,” he said.
Japan’s Rakuten Inc, which holds a 51 percent stake in Rakuten International Commercial Bank Co (樂天國際商銀), would be allowed to send directors or managers of its Rakuten Bank to the board of its local unit, as the Japanese bank has no local operations, Koo said.
NOT ALL GOOD: Analysts warned that other data for last month might be less rosy due to the virus and analysts expect the PMI to contract again next month Chinese factory activity saw surprise growth last month as businesses went back to work following a lengthy shutdown, but analysts said that the economy faces a challenging recovery as external demand has been devastated by the COVID-19 pandemic, while the World Bank said that growth could screech to a halt. China is slowly returning to life after months of tough restrictions aimed at containing the virus, which put millions of people into virtual house arrest and brought economic activity to a near standstill. The strict measures saw a closely watched gauge of manufacturing plunge to its lowest level on record in February,
The output of the global smartphone industry this year is to contract by 7.8 percent on an annual basis as the COVID-19 pandemic ushers in a global recession, Taipei-based market researcher TrendForce Corp (集邦科技) said in a report on Monday. The global production of smartphones is expected to fall to 1.29 billion units, as the pandemic dampens demand for consumer electronics, leading to a decline in shipments across Europe and North America, TrendForce said. With consumers delaying smartphone purchases and thereby lengthening the device replacement cycle, overall prices would suffer a setback that is expected to negatively affect the profitability of smartphone
ELECTRONICS Lite-On delays sale of unit Lite-On Technology Corp (光寶科技) yesterday said it would postpone the sale of its solid-state drives (SSD) business to Kioxia Holdings Corp, formerly known as Toshiba Memory Holdings Corp, due to disruptions amid the COVID-19 pandemic. Last year, the Taiwan-based electronics components supplier struck the deal with the Japanese firm, agreeing to sell the unit for US$165 million. Citing unfinished integration work due to the pandemic, Lite-On has deferred today’s closing date until further notice, adding that the delay would not have a negative effect on the unit’s operations. AUTO PARTS Hiroca approves dividend Automotive interior parts supplier Hiroca
ALL ABOUT STRATEGY: The company is optimistic, saying that its gross margin should increase year-on-year, but it is scaling back on its plans to expand capacity Quang Viet Enterprise Co (QVE, 廣越), which makes down jackets and garments for sportswear and outdoor brands including Adidas AG, yesterday said that revenue might drop 5 to 10 percent annually this year as some customers trimmed orders in response to the COVID-19 pandemic. That would mark its first revenue decline since 2016. Quang Viet posted record-high revenue of NT$16.26 billion (US$537.45 million) last year, up 22 percent from 2018. Down jackets made up 40 percent of it revenue last year. North Face Inc and Patagonia Inc are this year likely to reduce orders by 20 to 30 percent from a