CTBC Bank is ap­proved by FSC to set up main­land China joint ven­ture

The China Post - - TAIWAN BUSINESS -

CTBC Bank, the flag­ship bank­ing unit of CTBC Fi­nan­cial Hold­ing Co., has re­ceived a green light from the Fi­nan­cial Su­per­vi­sory Com­mis­sion to set up a con­sumer fi­nanc­ing joint ven­ture in main­land China.

The in­vest­ment plan still re­quires ap­proval from the China Bank­ing Reg­u­la­tory Com­mis­sion, but if it pro­ceeds smoothly, CTBC Bank will be­come the first Tai­wanese bank to own a stake in a con­sumer fi­nanc­ing en­tity in China.

CTBC Bank is part­ner­ing with Huis­hang Bank, the He­fei Depart­ment Store Group, and Chi­nese re­tail and prop­erty com­pany GOME Hold­ing Group in the joint ven­ture.

The Tai­wanese bank

is plan- ning to in­vest 350 mil­lion Chi­nese yuan ( US$54.68 mil­lion) for a 35 per­cent stake in the new com­pany, mak­ing it the largest share­holder.

CTBC Bank is ex­pected to have five of the 12 seats on the joint ven­ture’s board of di­rec­tors.

Huis­hang Bank, GOME Hold­ing and He­fai Depart­ment Store will own 30 per­cent, 30 per­cent and 5 per­cent of the new com­pany, re­spec­tively.

Ac­cord­ing to the FSC, the top fi­nan­cial reg­u­la­tor in Tai­wan, con­sumer fi­nanc­ing com­pa­nies in China are not al­lowed to make a loan of more than 200,000 yuan and they are pro­hib­ited by Chi­nese author­i­ties from mak­ing auto loans or mort­gages.

An­a­lysts said CTBC Bank is ex­pected to take ad­van­tage of the joint ven­ture to pen­e­trate China’s credit card mar­ket.

In ad­di­tion to the deal to open a con­sumer fi­nanc­ing com­pany there, CTBC Bank has an­nounced it will ac­quire a 100 per­cent stake in China CITIC Bank In­ter­na­tional Ltd.

In turn, CTBC Bank will launch a pri­vate place­ment in which China CITIC Bank will ac­quire a 3.8 per­cent in the Tai­wanese bank. China CITIC Bank is un­der the cor­po­rate um­brella of the CITIC Group, one of China’s fi­nan­cial giants.

Mean­while, CTBC Se­cu­ri­ties, a se­cu­ri­ties trad­ing sub­sidiary of CTBC Fi­nan­cial, has agreed to set up a joint ven­ture in Fu­jian by team­ing up with Fu­jian Hu­a­tou In­vest­ment Co. and Fu­jian Elec­tron­ics and In­for­ma­tion (Group) Co..

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