Line Financial Taiwan Corp (台灣連線金融科技) yesterday said that it would hold a majority 49.9 percent stake in a planned Web-only bank, with the remaining 40.1 percent stake held by four financial institutions.
Taipei Fubon Bank (台北富邦銀行) would be the second-biggest shareholder with a 25.1 percent stake, while CTBC Bank (中信銀行), Standard Chartered Bank Taiwan Ltd (渣打台灣銀行) and Union Bank of Taiwan (聯邦銀行) would each hold 5 percent, Line Financial said.
Line Financial did not identify the companies with shares in the remaining 10 percent, but local media have reported that Taiwan Mobile Co (台灣大哥大) and Far EasTone Telecommunications Co (遠傳電信) would each hold 5 percent.
The Financial Supervisory Commission (FSC) in August said that non-financial firms would be allowed to hold up to a 60 percent stake in Web-only banks and limited the holdings by financial institutions to 40 percent.
However, it requires at least one financial firm to hold more than a 25 percent stake to ensure that an online bank has sufficient financial expertise.
The FSC is to issue two licenses for Web-only banks by the end of this year.
Line Financial chairman and general manager Roger Chen (陳立人) said in a news release that the firm would leverage its partners’ expertise in risk control and products design as well as compliance and money-laundering control.
The firm would set up a preparation office after all stakeholders officially announce their investments in the online bank, Chen said, without giving a time frame.
Taipei Fubon Bank, which earlier this year bought a 19.99 percent stake in Line Taiwan Ltd’s (台灣連線) subsidiary Line Pay for NT$3.15 billion (US$102 million), yesterday said that it was honored to become Line Financial’s major bank partner.
Taipei Fubon Bank general manager Roman Cheng (程耀輝) said he is confident that the team would be able to provide payment, money transfer, loan, money management and insurance services.
The Line messaging app, with 21 million users in Taiwan, is a great platform for a Web-only bank, he added.
CTBC Financial Holding Co (中信金控) president Daniel Wu (吳一揆) said that the bank tried without success to gain more than a 5 percent stake.
“Line Financial told us that the Web-only bank will serve as an open platform and it hopes to work with more banks that can make different contributions,” Wu said.
CTBC, which still wants to increase its stake, views the investment as a way to participate in innovative services, Wu said.
Chunghwa Telecom (中華電信) and its partners are also seeking on of the licenses.
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