Taiwanese Banks in China to See 2014 Profits Double Last Year's
2014/12/25 | By Judy LiTaiwanese banks in China continue to see ballooning profits this year. In the first 10 months such banks raked in combined pretax profits of NT$3.082 billion (US$102.73 million), almost double the NT$1.65 billion (US$55 million) posted in 2013, according to the statistics released by the Financial Supervisory Commission (FSC).
Some 16 Taiwanese banks have branches in China, seven with sub-branches, two with subsidiaries, and three with representative offices. Also four Taiwanese banks are waiting for approval by China's financial authority to set up footholds, including CTBC Bank and Bank of Taiwan, each intending to set up a branch in Guangzhou, with Cathay United Bank to set up a sub-branch in Shanghai, and E. Sun Bank a subsidiary in Shenzhen.
Last year the three most profitable Taiwanese banks in China were Cathay United Bank, First Bank and Mega International Commercial Bank, with pretax profits of NT$344 million (US$11.47 million), NT$230 million (US$7.66 million) and NT$150 million (US$5 million), respectively. Their first-10-month profits this year led as the top-three with respective values of NT$535 million (US$17.83 million), NT$409 million (US$13.63 million) and NT$317 million (US$10.57 million).
Taiwanese banks in China that are allowed to operate renminbi businesses include Hua Nan Bank's Shenzhen branch, Chang Hwa Bank's Kunshan branch, Cathay's Shanghai branch, First's Shanghai branch, Land Bank of Taiwan's Shanghai branch and Taiwan Cooperative Bank's Suzhou branch.
As of the end of October, Taiwanese banks' total risk exposure to China amounted to NT$1.75 trillion (US$58.33 billion), or 68% of their net value. In the same period, remittance to China came to US$317.6 billion and US$174 billion vice versa.
At the end of November, foreign banks in Taiwan witnessed pretax profits of NT$40.5 billion (US$1.35 billion), up 26.6% year on year, with deposits of NT$2.4 trillion (US$80 billion), taking a share of 8% of the total in Taiwan's banking system, with loans of NT$2.3 trillion (US$76.67 billion), accounting for 9%. (JL)