WHOLESALE BANKING | Cesar Tordesillas, Taiwan

Taiwanese banks prepare more mainland expansion

Taiwanese banks are expanding their in the mainland with two opening branches in the last two weeks and another one on the way.


Bank of Taiwan, Taiwan's biggest bank by assets in 2011, officially opened its Shanghai branch on Tuesday, following Mega International Commercial Bank's Suzhou branch opening on June 21. Meanwhile, sources said E Sun Commercial Bank has also obtained approval from the China Banking Regulatory Commission and will likely open a branch next month in Dongguan, Guangdong province.

Previously, Chinatrust Commercial Bank established its first mainland branch in late March. To date, 10 Taiwanese banks have acquired this status, and most of these are now actively engaged in China syndicated loans.

Taiwan Cooperative Bank, Taiwan's second-biggest bank by assets in 2011, was among the top five mandated arrangers for non-Rmb China loans in the first half of 2012. The bank joined as mandated lead arranger and bookrunner on CDB Leasing's US$300m three-year loan signed in June, which saw six other Taiwanese banks among the 12-bank lender group.

"We have to compete against foreign banks with a long-established China presence," said Phoebe Li, senior vice president, corporate finance department, at Chinatrust Commercial Bank.

Currently, Industrial Bank of Taiwan, Taiwan Business Bank and Taipei Fubon Commercial Bank have all set up representative offices in the mainland, waiting to be upgraded to branches after a year of operation.

Bank SinoPac is particularly ambitious, planning to set up a China entity instead of just a China branch. It announced in May that it will apply for corporate capacity of its representative office in Nanjing, Jiangsu province.

Meanwhile, some Taiwanese lenders are already eyeing second mainland branches. Hua Nan, which now has a Shenzhen branch, planned to open a Shanghai branch, while Taiwan Cooperative Bank, which has a Suzhou branch, hoped to open in Tianjin within this year.

"It is a good thing that all our peers have entered into China. Each of us is too small in size, and China is too big for us. We are never short of business opportunities, so we should cooperate more and take bigger clients together," a China-based banker said.

According to Thomson Reuters LPC data, Taiwanese banks took up a more than 35% lender share of Asia US$ loans, by deal count, in the second quarter of 2012.


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