State-run First Commercial Bank (第一銀行), the banking arm of First Financial Holding Co (第一金控), yesterday confirmed that it has pulled out of the competition for two Web-only bank licenses over concern that it would not have a majority stake or decisive say in operations.
The Financial Supervisory Commission is to issue Web-only bank licenses this year, with the application process to open today.
“The share structure arrangement would limit participation by First Bank to capital investment, as it could not own a majority stake and therefore could not dominate policy decisions,” First Financial chairman Ray Dawn (董瑞斌) said at a public function yesterday.
A so-called national team has disclosed its lineup, which includes Chunghwa Telecom Co (中華電信) with a 30 percent share, Mega International Commercial Bank (兆豐銀行) with 25.1 percent, Shin Kong Commercial Bank (新光銀行) with 14 percent and Pxmart (全聯福利中心) with 9 percent.
The other camp features Line Financial Taiwan Corp (台灣連線金融科技), Taipei Fubon Commercial Bank (台北富邦銀行), Taiwan Mobile Co (台灣大哥大), CTBC Bank (中國信託銀行), Union Bank of Taiwan (聯邦銀行) and Standard Chartered Bank Taiwan Ltd (渣打台灣銀行).
That suggests no room for other players.
First Bank would prefer to upgrade its systems and expand its portfolio of Internet-related businesses, Dawn said.
“With or without a Web license, First Bank will not sit out when it comes to online or mobile banking business, but will seek organic growth,” Dawn said.
The bank aims to raise its profit contribution from overseas operations of between 45 percent and 48 percent to 50 percent, he said.
The goal requires an increase of customers in overseas markets and is achievable by following Taiwanese firms with expansion plans abroad, Dawn said.
Taiwanese firms are expanding their footprints on the world stage and First Bank must follow suit to better serve its clients, he said.
North America has great business potential and First Bank aims to make the region a key profit driver, First Bank president Grace Jeng (鄭美玲) said.
To that end, First Bank is to open branches in Houston, Los Angeles and San Francisco next year, raising the number of offices in the US to 11, Jeng said.
Interest spreads average 2 to 3 percent in the US market, higher than 1.5 to 2 percent in Taiwan, Jeng said.
First Bank is also to add offices in Germany, Cambodia and Indonesia, so overseas lending could increase by double-digit percentage points from this year, she said.
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