The Financial Supervisory Commission (FSC) yesterday approved local financial firms owning a controlling stake in finance leasing or venture capital companies in China.
Subsidiaries of local banks or financial holding firms may apply to own a stake of 25 percent or more in a single Chinese finance leasing company in which they can control the investee’s operation, FSC Banking Bureau Director-General Kuei Hsien-nung (桂先農) said at a press briefing.
In addition, subsidiaries of Taiwanese industrial banks may apply to own a stake of 25 percent or more in a Chinese venture capital company, Kuei added.
The relaxation, which could take effect as soon as today, came after the nation’s banking sector on Wednesday pressed the FSC to further ease cross-strait banking rules so they can better compete with foreign rivals in the Chinese market.
In related news, the FSC said yesterday non-performing loans (NPL) for the nation’s 37 lenders totaled NT$167.9 billion (US$5.24 billion), or 0.87 percent of total loans, at the end of last month.
That marked a record-low NPL ratio with a drop of 0.04 percentage points from the previous month, the FSC said.
The coverage ratio — loans covered by banks’ provisions and a gauge indicating the sufficiency of bad loan reserves — stood at 118.98 percent on July 31, up 5.6 percentage points month-on-month, the FSC said.
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