Industrial Bank of Taiwan (IBT, 台灣工業銀行) has received preliminary approval from the Financial Supervisory Commission to transform itself into a commercial bank, putting an end to Taiwan’s industrial banking industry.
IBT, the sole remaining industrial bank in the domestic market, filed its restructuring plan with the commission last month, aiming to become a commercial bank upon the consolidation of subsidiary China Bills Finance Corp (中華票券金融) and to go public on the local bourse.
The commission has provided its general approval, the bank said in a statement yesterday.
The bank is set to become the nation’s 40th commercial bank after restructuring.
“We hope to transform into a boutique commercial bank with a focus in corporate loans,” it added.
In a bid to reach the goal, the bank has gradually adjusted its income mix for years, with corporate loans already generating the majority of its profits.
The bank plans to establish an independent firm to run its venture capital business — the other major business for industrial banks — after its restructuring.
A Banking Bureau official said the government had encouraged the nation’s industrial banks to transform by merging with existing commercial banks.
However, since IBT did not find appropriate opportunities for mergers and acquisitions, the commission has given preliminary approval for it to restructure individually, the official said.
The bank, which has four branches, earned NT$1.9 billion (US$59.7 million) in pretax net profits last year, up more than 40 percent from a year earlier, with its outstanding loans balance reaching NT$120 billion to mark the highest level in its history, company data showed.
Industrial banking began in Taiwan in 1988, with a focus on financing domestic manufacturers and investing venture capital.
However, following the industrial transformation, industrial banks have seen their market gradually shrink as demand for commercial banks has climbed.
China Development Financial Holding Corp’s move (中華開發金控) to acquire Cosmos Bank (萬泰銀行), which is currently called KGI Bank (凱基銀行) last year completed the transformation of its industrial banking unit, China Development Industrial Bank (中華開發工業銀行).
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