Bank of Communications Gets Licence to Open Taiwan Branch

By Rose Yu

SHANGHAI--Bank of Communications Co. (3328.HK), China's fifth-largest bank by assets, said Wednesday it has received approval from Taiwan's financial regulator to open a branch in Taipei.

Bank of Communications, also known as BoCom and in which HSBC Holdings PLC (HBC) owns a 19% stake, said its Taipei branch has a registered capital of 1.475 billion new Taiwan dollars(US$49 million) and the deal marks the biggest investment by a mainland Chinese company in Taiwan so far.

"The establishment of the Taipei branch is an important step by the bank to expand its global footprint," said the state-run Chinese bank.

It said the Taipei branch will be mainly engaged in taking deposits, lending, remittance and trade finance.

Since Beijing and Taipei signed the Economic Cooperation Agreement Framework in June 2010, major Chinese banks have established representative offices in Taipei as thawing cross-Strait relations have opened up opportunities in trade finance.

Taiwan's Financial Supervisory Commission, the financial regulator, said in December that Bank of China Ltd., the third-largest bank by assets on the mainland, and BoCom were given approval to upgrade their representative offices to branches after a year of operation on the island.

The FSC has gradually loosened restrictions on Chinese banks investing in Taiwan. Since Jan. 2, the regulator has permitted Chinese banks to buy stakes in Taiwan banks. There have been no deals to date, but some Taiwanese banks--including state-run Mega Financial Holding Co. and Cathay Financial Holding Co.--have expressed interest in selling stakes to Chinese counterparts hoping closer ties will speed up their own expansion in China.

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