The Financial Supervisory Commission (FSC) said yesterday DBS Bank (星展銀行) would need a capital injection from its Singaporean parent both to meet tightened capital requirements and to qualify for its plan to upgrade a local branch to a subsidiary in the third quarter next year.
Foreign banks must maintain at least NT$200 million (US$6.6 million) in working capital — up from NT$100 million before the commission changed the requirements in December last year to enhance risk control — for each individual branch in Taiwan, with the threshold rising to NT$250 million if the branches take deposits from individuals.
All 28 foreign banks operating in the country were given one year to make the adjustment and DBS is the only foreign lender that has yet to meet the requirement, the commission said.
Chang Kuo-ming (張國銘), deputy director-general at the commission’s banking bureau, said DBS has applied to increase capital by NT$5.95 billion before Dec. 1 and the fund may help meet the upgrade requirement later.
A banking subsidiary must maintain NT$10 billion in working capital, as required of all domestic lenders, and is subject to the commission’s regular stress tests, Chang said.
DBS, the largest lender in Southeast Asia by assets, is scheduled to celebrate relocations of three branches acquired from Bowa Bank (寶華銀行) next week in a continued bid to strengthen its presence in Taiwan, the Singapore-based lender said in a statement yesterday.
One branch is located in the prime Xinyi District (信義), where the bank plans to move its Taipei headquarters in the first half of next year and upgrade to a subsidiary in the third quarter, the bank said.
DBS has said it aims to become one of the top three foreign banks in Taiwan in five years’ time and has increased investment on infrastructure facilities and personnel expansions.
The branch relocations to more populous areas in Taipei and Taichung cities on Wednesday next week are similar moves to realize the bank’s ambition, DBS said.
The bank posted a net profit of NT$145 million for the first nine months of this year, slumping 68.95 percent from a year earlier as bad loan costs rose 2.36 times to NT$484.11 million, from NT$143.90 million, company statistics showed.
Net fee income more than doubled to NT$488.27 million during the January-to-September period from NT$238.12 million a year earlier, while net interest income rose 22 percent to NT$147 million billion from NT$120 million, the lender’s data showed.
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