You are here: HomeTaiwan 2011 › Banking

Home-grown banks look across the strait

Jul 14, 2011
Credit : GMI Post


Amid efforts to internationalize its trade further, Taiwan has not neglected the importance of keeping its domestic economy stable and making it attractive to potential foreign investors.

Among the key pillars that kept the Taiwanese economy strong during the deep and protracted recession from 2007 to 2008 was its stable financial sector and banking industry.

“Our financial structure has been in a stable position because we follow our own regulations. In fact, we have a surplus in our current account every year,” stressed Finance Minister Lee Sush-Der.

To make the local economy more attractive to foreign capital, the government of President Ma Ying-Jeou instituted drastic tax cuts.

“We did a lot of tax reform. After 30 years, our flat rate was lowered to just 10 percent. So, a lot of money is coming back already. Corporate income tax was also lowered from 25 percent to 17 percent for all businesses,” said Lee.

In the wake of those new measures, the banking sector has experienced a resurgence of activity, with Taipei-based Mega International Commercial Bank reporting impressive profits last year.

While banking giants around the world struggled to get back in the black, so to speak, Mega ICBC posted a 2.44 percent increase in
its pretax income last year.

One of the leading banks in Taiwan, Mega International Commercial Bank, as of 2013, had 107 branches at home and 34 branches, offices, and related outposts overseas. It employs 5,381 people and reported an aggregate paid-in capital of around $ 2.54 billion. (Credit: Solomon203/WIkipedia Commons)

A product of a merger of the International Commercial Bank of China and Chiao Tung Bank in 2006, Mega ICBC has grown to become one of the country’s largest financial groups, with 107 local branches, 19 overseas branches, and three representative offices abroad.

As of 2010, the multi-awarded bank had assets of just over $85 billion dollars. Although only fourth in size, Mega ICBC emerged at the top of the industry in terms of profits.

“Our relentless goal is always to be the number one bank in Taiwan through steady and not volatile growth. We’d like to increase our international side,” said Chairman Tsai Yeou-Tsair.

“Our bank’s specialty is international trade. If a foreign company wants to come to Taiwan, we have very good connections for them. We can advise them, and they can use our network. We have a deep knowledge of industry over the past 60 years,” Tsai added.

To remain competitive globally, Mega ICBC is further expanding its operations in China this year and in the Middle East. According to the bank, it has signed cooperation agreements with Bank of China and Bank of Communication in the first quarter of 2011, and is not ruling out an alliance with other leading Chinese banks.

“Our bank may also be a good bridge for foreign banks and other institutions to get into China,” he also said. Like all players in the local industry, Fubon Financial Holding has staked its future growth on its business with mainland China. Fubon Financial Holding owns Taipei Fubon Bank as well as the country’s second-largest life insurance company and the largest general insurance, property, and casualty insurance company.

Meanwhile, its securities company has secured the third-largest market share.

“China remains our main strategic focus. We have an investment in Xiamen through Fubon Bank (Hong Kong), which was the first Taiwanese bank set up in Hong Kong,” said President Victor Kung.

“We also established a general insurance company in China, which is also headquartered in Xiamen. In life insurance, we signed a contract with Nanjing Zijin Investment, and expect to be awarded a life insurance license later this year or early next year,” Kung added.

For the Fubon group, Taiwan possesses a competitive edge over other regional players when it comes to business in mainland China.

“We have a certain lead in customer service on the retail side, as well as on small and medium banking. So these are the areas that we could really contribute to the Chinese banking sector,” said Kung.

“We already have a lot of Taiwanese clients who are very familiar with mainland China. Through their relationship with us, we can serve as an intermediary—in introducing new foreign parties to them, helping foreign parties enter mainland China through our clients, as well as introducing them to potential Taiwanese joint venture partners operating in China, with us playing the part of corporate financier and adviser,” he added.

 

- Originally prepared by Global Media for Foreign Affairs Special Report on Taiwan 2011 

Taiwan 2011 was prepared for and originally printed in Foreign Affairs magazine.

PDF of the printed report

Next :  

latest special features:

Upcoming Reports from

U.S. Great Lakes 2018

See Preview »

With a relationship going back more than 160 years, the United States and Japan share very deep historical ties. And the Midwest states of Illinoi...

Germany 2018

See Preview »

The economic center of gravity shifts further towards Asia. With over 4 billion people, Asia is becoming a more sophisticated consumer market for g...

Japan 2018

See Preview »

As Abenomics shows signs of working, Japan is experiencing record growth. The world is keen to see Japan’s next steps for its comeback as the Asian...




  • Global Media is your partner in reaching a powerful international audience through high-level economic reporting.

    Our ambition is to highlight under-reported developments and opportunities around the world, and allow leaders in these regions and sectors to take their message to the highest global level. We partner with top media to communicate with the world’s most powerful audiences. We specialize in communication and branding initiatives that help our clients effectively get their messages to their existing and potential partners. We achieve results for our clients by introducing them and their initiatives to an audience of elite international business and government leaders.

    Global Media Inc. is an independent media agency with offices in Hong Kong and Canada. GMI has more than a decade of experience in the writing, researching, and production of promotional country reports, with media partners from East Asia to North America. We have teams worldwide that develop country and thematic reports on the latest economic trends and developments.

    We are a media partner of Foreign Affairs,the United States’ most influential publication, published by the New York-based Council on Foreign Relations.

    Nearly a century old, there isn’t a more influential or higher-reaching publication in the United States than Foreign Affairs. The journal is ranked #1 in influence by U.S. opinion leaders in a recent nationwide study conducted by Erdos and Morgan, the premier business-to-business research firm. Their findings place Foreign Affairs ahead of all media, both print and broadcast, including The New York Times, The Wall Street Journal, The Economist, and The Washington Post.

    Testimonials:

    “We were extremely impressed with how efficient, well-coordinated, responsive and reliable the Global Media Inc. team was. We owe them a lot for their professionalism. We were very pleased with the outcome, and the article was very well-written. We hope to have an opportunity to work with Global Media Inc. again in the near future.� – Japan Airport Terminal Co. Ltd.
    “The Global Media team’s professionalism was excellent. Their team was great and always gave us the right suggestions and information. The product was excellent, and we were very happy to have such a great opportunity working with their excellent team.â€� – National Graduate Institute of Policy Studies (GRIPS)
    “We were honored to be chosen as one of the good universities in Japan. This article conveyed Seigakuin University’s educational ideals and the message from President Akudo. The advertisement was conspicuous and gave a good impression that Seigakuin nurtured students to contribute to world peace. We really appreciated what Global Media Inc. had did for us.â€� – Seigakuin University

    Whom we have featured:

    • Australian Prime Minister Julia Gillard
    • Australian Foreign Affairs Minister (and former Prime Minister) Kevin Rudd
    • Japanese Prime Minister Shinzo Abe
    • Qatari Minister of International Trade and Industry Dato’ Sri Mustapa bin Mohamed
    • Japanese Minister of Education, Culture, Sports, Science and Technology Yoshiaki Takaki
    • Taiwanese Foreign Minister Yang Chin-Tien
    • Taiwanese Finance Minister Lee Sush-Der
    • Taiwanese Economic Affairs Minister Shih Yen-Shiang
    • Taiwanese National Science Council Minister Lee Lou-Chuang,
    • Taiwanese Deputy Minister of Transport and Communications Yeh Kuang-Shih
    • Taiwanese Political Deputy Minister of Education Dr. Lin Tsong-Ming
    • Indonesian Ambassador to the United States Dr. Dino Patti Djalal
    • Indonesian Investment Coordinating Board Chairman Gita Wirjawan
    • Philippine President Benigno S. Aquino III
    • Philippine Senate President Juan Ponce Enrile