TAIPEI–Land Bank of Taiwan said yesterday it is scheduled to open a Shanghai branch Dec. 29, becoming the first state-owned bank to upgrade its mainland representative office to a branch.
In the initial phase, the Shanghai branch will offer funds in foreign currencies to Taiwanese businesses operating in China, bank spokesman Wu Fu rong said.
After one year, the bank is expected to begin to show a profit and will expand to Chinese yuan business services for Taiwanese customers, Wu said.
Kuo Chang-lung, who is currently the director of Land Bank’s Shanghai representative office, will head the new branch, which will be located in Shanghai’s Pudong District.
Land Bank of Taiwan was among the first five Taiwanese banks to gain approval from the China Banking Regulatory Commission (CBRC) to open branches in China.
The bank has had a representative office in Shanghai since 2003 and has been waiting a long time to upgrade to a branch. It is planning a grand opening ceremony that will be attended by its chairman Wang Yao-shing and other bank officials.
First Commercial Bank was also given the green light by Chinese authorities to open a branch in Shanghai. Cathay United Bank and Chang Hwa Commercial Bank have obtained approval to set up branches in Kunshan, while Taiwan Cooperative Bank was given permission to open a branch in Suzhou.
Under the recent economic cooperation framework agreement (ECFA) between Taiwan and China, Taiwanese bank branches in China will be allowed to conduct Chinese yuan business after two years once they are showing a profit following its establishment. For other foreign banks, the requirement is three years in operation.
Taiwanese banks will also be allowed to conduct operations in the Chinese yuan business with Taiwanese investors in China after one year of operation there.
Wu forecast that his bank’s Shanghai branch will double its revenue once it goes into Chinese yuan business.
In an earlier statement, the CBRC said it hopes that the presence of Taiwan’s bank branches in China will help promote cross-strait economic and trade relations and maintain the steady development of the cross-strait banking sector.