Taiwanese banking regulators are to meet with their Chinese counterparts in Taipei on Monday for talks on easing market access rules for bilateral financial institutions, the Financial Supervisory Commission (FSC) said yesterday.
China’s Banking Regulatory Commission Chairman Shang Fulin (尚福林) and his colleagues will arrive in Taipei tomorrow to join the third round of cross-strait banking talks with FSC Chairman Cheng Yuh-chang (陳裕璋) on Monday, the commission said.
The two sides will consider allowing their banks to own a larger stake in peers across the Taiwan Strait so that they can forge more meaningful partnerships, Banking Bureau Deputy Director-General Jean Chiu (邱淑貞) said.
Currently, individual Chinese banks can only own a 5 percent stake in their Taiwanese peers and together the investments may not exceed 10 percent, while Taiwanese banks can buy up to a 20 percent stake in Chinese lenders.
“Both sides will raise the limits significantly this time,” Chiu said by telephone, as Taiwan and China cautiously deepen cross-strait banking ties on concerns over political implications.
To date, no Chinese bank has filed an application to invest in a Taiwanese peer and the 5 percent restriction is widely seen as the main culprit.
The two sides will also mull ditching requirements that banks must have five years of prior operational experience in advanced markets to qualify to set up branches across the Taiwan Strait, Chiu said.
The planned deregulation would enable Taiwanese lenders, such as Taishin International Bank (台新銀行) and Far Eastern International Bank (遠東銀行), to enter the Chinese market.
In addition, the commission will ask Chinese banking authorities to facilitate a review of attempts by Taiwanese lenders to set up second branches or outlets in China, Chiu said.
Seven domestic lenders are awaiting Chinese regulatory approval to expand their banking operations in China, where lending operations generated considerable profits last year due to higher interest margins.
State-run First Commercial Bank (第一銀行), Taiwan Cooperative Bank (合庫銀) and Hua Nan Commercial Bank (華南銀) are seeking to open new branches in Chengdu, Tianjing and Shanghai respectively.
Cathay United Bank (國泰世華銀行) is awaiting the go-ahead for a branch in Qindao and Bank SinoPac (永豐銀) for a subsidiary in Nanjing.
As a goodwill gesture, Taiwanese regulators on Tuesday approved plans by China’s Construction Bank Corp (中國建設銀行) to upgrade its representative office in Taipei to a branch and Chinese regulators gave the green light for Taiwan Business Bank (台企銀) to set up a branch in Shanghai.
The Chinese delegation is scheduled to leave on Tuesday.
INVESTOR RESILIENCE? An analyst said that despite near-term pressures, foreign investors tend to view NT dollar strength as a positive signal for valuation multiples Morgan Stanley has flagged a potential 10 percent revenue decline for Taiwan’s tech hardware sector this year, as a sharp appreciation of the New Taiwan dollar begins to dent the earnings power of major exporters. In what appears to be the first such warning from a major foreign brokerage, the US investment bank said the currency’s strength — fueled by foreign capital inflows and expectations of US interest rate cuts — is compressing profit margins for manufacturers with heavy exposure to US dollar-denominated revenues. The local currency has surged about 10 percent against the greenback over the past quarter and yesterday breached
MARKET FACTORS: Navitas Semiconductor Inc said that Powerchip is to take over from TSMC as its supplier of high-voltage gallium nitride chips Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) yesterday in a statement said that it would phase out its compound semiconductor gallium nitride (GaN) business over the next two years, citing market dynamics. The decision would not affect its financial targets announced previously, the world’s biggest contract chipmaker said. “We are working closely with our customers to ensure a smooth transition and remain committed to meeting their needs during this period,” it said. “Our focus continues to be on delivering sustained value to our partners and the market.” TSMC’s latest move came unexpectedly, as the chipmaker had said in its annual report that it has
SECURITY WARNING: The company possesses key 3-nanometer technology, and Taiwan should prevent it from being transferred to China, a lawmaker said The Ministry of Economic Affairs yesterday said it would conduct a “strict review” of any proposed acquisition of Taiwanese tech company Source Photonics Co (索爾思光電), following media reports that a Chinese firm was planning to buy the company in the Hsinchu Science Park (新竹科學園區). Local media reported that Suzhou Dongshan Precision Manufacturing Co (東山精密), China’s largest printed circuit board manufacturer, had announced plans to acquire Source Photonics for 5.9 billion yuan (US$823.1 million). The ministry said it has not received an application from Source Photonics and has formally notified the company that any buyout would constitute a change in its ownership structure. The
Gudeng Precision Industrial Co (家登精密), the sole extreme ultraviolet pod supplier to Taiwan Semiconductor Manufacturing Co (台積電), yesterday said it has trimmed its revenue growth target for this year as US tariffs are likely to depress customer demand and weigh on the whole supply chain. Gudeng’s remarks came after the US on Monday notified 14 countries, including Japan and South Korea, of new tariff rates that are set to take effect on Aug. 1. Taiwan is still negotiating for a rate lower than the 32 percent “reciprocal” tariffs announced by the US in April, which it later postponed to today. The
RSS