Taipei Times: Is there an effort by ABN to beef up consumer banking business at the cost of corporate banking in Taiwan?
Jerry Letendre: Actually since 1997, we have been in consumer banking and we have been accelerating our efforts of late. This is a global objective as well -- not simply a Taiwan or Greater China objective. To share some background, last year the bank decided to restructure itself in order to a achieve better focus on critical client segments or business lines. To this end, we have divided the bank into three banks basically. One is wholesale banking, which includes investment banking, equity capital markets, mergers and acquisitions and corporate finance will be captioned within the wholesale banking.
The second bank is the private banking and asset management business. The asset management business is where we manufacture mutual funds. We have an asset management [operation] with nearly US$200 billion under management.
The third business, which I head in Greater China, is consumer and commercial banking. This is the source of the greatest amount of profit for the bank. We have excellent growth plans for all three businesses. At the moment, the consumer and commercial clients -- what we call the triple C business -- is going to produce the greatest amount of profits.
TT: What do you mean by Greater China?
Letendre: By Greater China, we mean Hong Kong, Taiwan and China. And as you can imagine, there is not much going on in China. But as a foreign bank, we are pretty well positioned. But again the access that foreign banks have on the mainland is fairly limited. Nonetheless, we are looking forward to that opening up, and it represents some very interesting prospects for us.
TT: But you are based in Taiwan?
Letendre: In the near term, the action is in Taiwan. My personal view, and of the bank, is that you have a much higher success of entering the mainland from a Chinese market, like Hong Kong or Taiwan. But there are both pros and cons depending on which country you chose. We have chosen to make it Taiwan. The core part of my strategy is to build our presence in Taiwan and use that as a springboard to enter the mainland -- when we are allowed to do that.
TT: So Taiwan helps you get into China?
Letendre: I mentioned the strategic significance of Taiwan, and it does have a strategic significance of us in order to get into the mainland. But if I look at the Chinese marketplace, then I look at where the most interesting groups and centers are because we are not going to expand all over China. It is going to be too difficult and too expensive. So we have to pick and chose where we want to grow. If I have to tell you the five most interesting places, it would be Shanghai, Beijing, Guangdong, Hong Kong and Taiwan. I look at Hong Kong and Taiwan as two of the very interesting urban Chinese markets.
TT: So do you think this market is saturated or there is still a lot of potential?
Letendre: The market will continue to grow. In fact, our first quarter annualized GDP growth rates fell to a 26 year low. If I go back, how far does it take us. It takes us to 1975. How many recessions did the US have in between? At least, two or three. And Taiwan had to go this far to have only 1.1 percent GDP growth rate. So we have to keep that in perspective. What is troubling is that the growth historically has been much stronger. This is a short-term problem. If you look at the longer-term prospects of the market, it will continue to grow quickly.
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