FSC gives green light for banks to expand locally

By Amber Chung  /  STAFF REPORTER

Fri, Jul 20, 2007 - Page 12

The Financial Supervisory Commission (FSC) said yesterday it will license eight local banks to open a total of 10 new branches nationwide, in the first thawing of a freeze imposed three years ago to encourage consolidation in the banking sector.

But it was not all good news for the banks, which had applied for permission for a total of 20 new branches.

First Commercial Bank (第一銀行) and the Shanghai Commercial and Savings Bank (上海商銀) will be able to open two new outlets, though both must have one of their new branches in a rural area, the commission said.

E.Sun Bank (玉山銀行), Mega International Commercial Bank (兆豐國際商銀) and Taipei Fubon Bank (台北富邦銀行) each received permission to open a single new branch.

State-run Bank of Taiwan (台灣銀行), Cathay United Bank (國泰世華銀行) and Taiwan Cooperative Bank (合作金庫銀行) each received one new branch license, earned through helping the government handle problematic financial institutions in the past year.

Commission spokeswoman Susan Chang (張秀蓮) said three foreign lenders had applied to open new outlets but their applications were still under review. She said a decision would be announced shortly.

UBS AG said last month that it had filed applications to set up two more branches in Taichung and Kaohsiung to boost its wealth management business.

Meanwhile, Taiwan Cooperative chairman Hsu Teh-nan (許德南) said that the state-controlled bank might sell off or merge some of its branches in order to improve its efficiency.

"They have not lodged an official application so we haven't had a formal policy discussion about the matter," Chang said yesterday when approached about Taiwan Cooperative's plans.

The commission could allow troubled financial institutions to sell branches, she said.

Enterprise Bank of Hualien (花蓮企銀) had applied to do so before it was taken over in January but its application was rejected.