Chinese lenders’ focus on corporate banking poses a threat to its Taiwanese counterparts in competing for patronage from Taiwanese enterprises.
Having established representative offices in Taiwan for one year as of September 24, China’s two state-run banks--Bank of China and Bank of Communications has recently filed applications with Taiwan’s Financial Supervisory Commission (FSC) to upgrade the rep offices to branches, and the applications are expected to be approved in the first quarter of 2012 at the earliest.
The implicit agreement between FSC and its Chinese counterpart--China Banking Regulatory Commission (CBRC) indicates that CBRC will allow Taiwanese banks in China to handle renmimbi (RMB) business after the FSC issues a green light for Chinese banks in Taiwan to operate NT dollar-based business.
Insiders indicated that Chinese banks in Taiwan will focus on corporate banking at the beginning, so Taiwanese enterprises will be their target clients. And this is believed to pose a threat to Taiwanese banks in competing for patronage from Taiwanese enterprises on both sides of Taiwan Strait.
Generally speaking, it takes about two to six months for FSC to review the application turned in by a foreign bank for setting up a branch in Taiwan. So, the above-mentioned two Chinese banks may obtain the license for establishing branches in Taiwan in the first quarter of 2012 at the earliest.
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