Bank SinoPac (永豐銀行) has won approval from the Financial Supervisory Commission for plans to set up a subsidiary in China, as the lender aims to grow both corporate and retail banking operations in that country, group spokesman Michael Chang (張晉源) said yesterday.
Bank SinoPac, the flagship unit of SinoPac Financial Holdings Co (永豐金控), is the first Taiwanese lender to apply to establish a subsidiary in China, allowing it to tap into consumer banking market, whereas domestic peers have sought to first to set up branches and own stakes in Chinese lenders to facilitate expansions.
“We plan to establish a subsidiary in Nanjing with a capital of NT$9.28 billion [US$317 million],” Chang said by telephone. “It may start operations next year if things proceed smoothly.”
The investment plan still needs approval from Taiwan’s Ministry of Economic Affairs and financial authorities in Beijing, Chang said.
Bank SinoPac has no intention of taking up stakes in Chinese peers because such ventures are capped at 20 percent, meaning it would not have dominant say in the board over the partner’s development, Chang said.
However, the conglomerate welcomes Chinese banks to invest in Bank SinoPac, Chang said, adding that legal barriers — notably a regulation that allows Chinese banks to own a maximum of 5 percent stake in Taiwanese banks — has prevented potential strategic alliance.
“Prospective partners prefer more meaningful investments to boost overall financial efficiency,” he said.
Bank SinoPac is in talks to introduce Chinese blue-chip firms to list on Taiwan’s stock market once authorities ease regulatory restrictions, Chang said.
The lender is also poised to offer yuan-based products and services as Taiwan and China are about to work out a currency settlement regime, he said.
Yuan operations, which are currently limited to corporate customers at offshore banking units, generate 10 percent of the bank’s revenue and may make significant contributions in two to three years, he added.