Line Corp, creator of the Line messaging app, yesterday announced plans to set up a preparation office for Line Financial Taiwan Corp (台灣連線金融科技), which is seeking to team up with local lenders to create a digital bank.
Line regional chief Liu I-cheng (劉奕成) announced the plans at a news conference in Taipei, one day after the technology firm agreed to sell a 30 percent stake to two Taiwanese lenders.
“We aim to join hands with local financial institutions to set up Line Bank, a Web-only bank that will offer new financial services and products,” Liu said.
Line Financial would not own more than 50 percent of Line Bank and will limit the number of partners to five in keeping with local regulations, he said.
The bank is to take deposits, provide loans, and sell mutual funds and insurance policies, but will not issue credit cards, launch new financial products or establish its own securities units, he said.
The Financial Supervisory Commission (FSC) has indicated room for two Internet-only lenders in the nation and is drafting rules on their requirements and operations so interested parties can file applications later this year and start services by the end of next year.
Existing Line Pay partners might not necessarily have priority to be major shareholders of Line Bank, although they might be more familiar with Line products, Liu said.
Line Pay in August 2015 entered the local e-payment market and now has 3 million users, making it the most popular e-payment platform.
The company’s board on Wednesday approved plans to sell a 19.9 percent stake to Taipei Fubon Commercial Bank (台北富邦銀行) for NT$3.16 billion (US$103.4 million) and a 10 percent stake to Union Bank of Taiwan (聯邦銀行) for NT$1.58 billion. The share sales need regulatory approval.
Line Pay reportedly sought unsuccessfully to sell stakes to Cathay United Bank (國泰世華), CTBC Bank (中信銀行), Taishin International Bank (台新銀行) and E.Sun Commercial Bank (玉山銀行) at much higher prices.
Line Financial is to hire 150 people in fields such as legal compliance, risk management, financial technology and anti-money laundering, Liu said.
In related news, video game developer Soft-World International Corp (智冠) yesterday said its payment arm, Pay2Go Technology Corp (智付寶), has gained regulatory approval to merge with ezPay Taiwan Co (台灣電子支付) through a share swap scheme.
According to the plan, a share in Pay2Go is to be converted to one ezPay Taiwan share and the latter firm will cease to exist, Soft-World said, adding that the company will be called ezPay (簡單付).
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