Taiwan's China Development Industrial Bank is determined to build a regional network, focusing on venture capital, asset management and securities businesses through the establishment of new companies or acquisitions of existing firms overseas.
Benny Hu, president of CDIB, said the bank has plans to set up a venture capital company in Australia at the end of this year or early next year, and an asset management company in Hong Kong in the near future. Hu said the bank is also seeking opportunities to acquire securities companies in Japan, South Korea and Malaysia.
CDIB is the largest industrial bank in Taiwan, which achieved the status via transformation from a trust investment company in January.
Industrial banks, considered as specialized banks under Taiwan's banking law, are responsible for offering medium- and long-term funding to local industries to aid industrial development and are viewed as a transitory step into investment banks.
"In terms of the capital and net worth sizes, CDIB is confident it will become a regional force," Hu said.
After staging a rights issue in August, CDIB is now capitalized at NT$50.26 billion (US$1.58 billion) and its net worth is expected to increase to NT$102.1 billion by the end of this year from the current NT$81.62 billion. The 440 million share rights helped the bank raise NT$17.6 billion.
Hu said his bank is modeling its development on the example of international investment powerhouses, such as Goldman Sachs and Merrill Lynch.
"International expansion ranks as a top priority for CDIB. Internalization will help the bank diversify funding and income sources, and diversify risks as well." Hu added.
While it has become costly to acquire stakes in Asian banks, where an economic recovery has taken hold, CDIB's regional financial development strategy will feature venture capital fund investments, establishment of asset management companies and acquisitions of brokerages in the region, Hu said.
The local media has widely reported the bank is likely to acquire a stake in Fuh Hwa Securities Finance or Grand Cathay Securities.
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