State-run Taiwan Cooperative Bank (合庫銀行) plans to shut down the wealth management business of its Hong Kong branch to lower its exposure to the territory, Taiwan Cooperative Financial Holding Co (合庫金控) chairman Lei Chung-dar (雷仲達) said yesterday.
The move has little to do with the effects of the COVID-19 pandemic, but is instead aimed at helping the bank cope with a slump in its wealth management business and an increase in legal compliance costs, Lei told a public function in Taipei.
Whether Hong Kong can retain its status as the region’s financial hub is growing increasingly uncertain as capital has moved out of the territory since China imposed national security legislation there, Lei said, adding that it might be better to close the business, which could become unprofitable.
The three wealth management staffers based in the Hong Kong branch would return to Taiwan, he said.
The bank’s exposure to China stands at 35 percent, down from 48 percent last year, Lei said.
Overall overseas and offshore banking operations have so far this year accounted for 31 percent of the bank’s revenue, shrinking from 40 percent in previous years, and weighed by the virus outbreak and US-China trade dispute, he said.
Two other state-run banks, Taiwan Business Bank (台灣企銀) and Land Bank of Taiwan (土地銀行), have closed their wealth management businesses in Hong Kong for similar reasons.
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