Fubon head calls for rise in China holdings limit

The China Post news staff

Raising the Taiwanese banks’ shareholding cap in mainland Chinese banks should be on the top of the agenda at the next cross-strait talks regarding the financial industry, said the chairman of Fubon Financial Daniel Tsai (蔡明忠).

Since the signing of the cross-strait economic cooperation framework agreement (ECFA), Taiwanese banks are allowed to invest in or acquire Chinese banks in order to expand their market share in China. Currently, Taiwanese banks’ investment share in Chinese banks is restricted to 20 percent and each Taiwanese bank is only allowed to invest in two Chinese banks at most. Tsai hopes the cap can be raised to 40 percent in the next cross-strait negotiations concerning financial cooperation. Fubon Financial now holds 19.99 percent of China’s Xiamen Bank, which posted 20 percent growth last year, despite Chinese government efforts to curb asset growth in the banking industry. Fubon plans to conduct another round of capital investments in June.

Fubon’s investment strategy in the banking industry in China is to increase their shareholding percentage in Xiamen Bank. Fubon will not consider investment in another bank, even though controlling shareholder status is not allowed under the ECFA, said Tsai.

Fubon Financial is the second largest financial holding firm in Taiwan and its business covers banking, securities, asset management and the lottery.