The Industrial Bank of Taiwan (IBT, 台灣工銀) has received the go-ahead from the Financial Supervisory Commission (FSC) to set up a representative office in Tianjin, China, the bank said in an e-mailed statement yesterday.
The Taipei-based industrial lender said it was now preparing documentation for its application with Tianjin banking authorities and expects to set up the first Taiwanese bank in the Chinese city after receiving regulatory approval.
The IBT’s announcement comes amid rising economic cooperation and exchange between financial firms across the Taiwan Strait.
On Sept. 16, China approved four Taiwanese banks — the Land Bank of Taiwan (土地銀行), Chang Hwa Commercial Bank (彰化銀行), First Commercial Bank (第一銀行) and Taiwan Cooperative Bank (合作金庫銀行) — to upgrade their Chinese representative offices to branches.
In return, the FSC on Thursday last week approved plans filed by two Chinese lenders — Bank of China (中國銀行) and Bank of Communications (交通銀行) — to establish liaison offices in Taiwan, the first of its kind for Chinese banks.
While a representative office only allows a bank to conduct business-related research and gather market information, IBT said it selected Tianjin as its liaison site because of the high business potential offered by the Bohai rim area, its statement showed.
Under the leadership of chairman Kenneth Lo (駱錦明), IBT is trying to catch up with other Taiwanese peers to secure a foothold in the Chinese market, as its home turf in Taiwan is fragmented and competitive, it said.
On Sept. 16, the FSC gave the green light for Chinatrust Commercial Bank (中國信託商銀) to open a branch in Shanghai, while Cathay United Bank (國泰世華銀行) and Hua Nan Commercial Bank (華南銀行) received the commission’s approval to establish branches in China and are currently waiting for China’s permission.
The so-called Bohai Economic Rim region is made up of Beijing, Tianjin, and several coastal cities in Hebei, Shandong and Liaoning provinces, which is comparable to China’s southeastern coastal area comprising Jiangsu, Zhejiang, Fujian and Guangdong provinces, along with Shanghai in terms of gross GDP and per capita GDP.
Deutsche Bank analyst Nora Hou (侯乃鳳) said in a research note on Monday that she expected to see more policy moves and cross-strait partnerships in various forms in the near future.
Hou, however, noted that the results of this cross-strait financial opening “should take time to come to fruition and any sentiment driven by the near-term unrealizable M&A [merger and acquisition] theme would be short-lived.”
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