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Three gov't-linked banks actively expanding overseas operations.

Taipei, May 10, 2010 (CENS)--Getting rid of the influence form the global financial tsunami, Taiwan's domestic banks have gradually regained strength and some of them are planning to further expand overseas operations.

Three government-linked banks, namely First Commercial Bank, Chang Hwa Bank and Hua Nan Bank, will establish a total of about 10 branches this year since they expect to see growing profits from overseas operations.

Impacted by the global financial tsunami that broke out in the second half of 2008, many Taiwanese banks suffered operating losses abroad in that year, but have gradually recovered thereafter. Last year First and Chang Hwa both saw profits generated from overseas operations account for 15% of their total earnings and the percentage is expected to grow to 20% this year; while Hua Nan's corresponding percentage was 20%, which is very likely to jump to 30% in 2010.

Currently Hua Nan has six overseas branches in overseas metropolitan cities including New York, London and Hong Kong. In 2009 the bank scored after-tax profits of NT$3.992 billion (US$124.75 million at US$1 = NT$32), with about 20% coming from its overseas operations.

Insiders said that the gap of lending and deposit interest rates has narrowed to under 1.4 percentage points in Taiwan, only half that recorded by of the banks' overseas branches. In view of better profits in financial markets abroad, many domestic banks therefore intend to expand operations.

The above-mentioned three banks have already turned in applications to Financial Supervisory Commission for upgrading their representative offices in Shanghai, Shenzhen of Guangdong Province, and Kunshan of Jiangsu Province, to branches. Other than China, the three banks have also decided to set up more footholds in other countries, mainly in Southeast Asia.
Overseas Deployment of Three Gov't-Linked Banks

Bank First

Existing overseas footholds 13 branches, three rep.
 offices, a subsidiary in U.S.
 plus six branches there

Locations of overseas Shanghai, Macao, Hanoi
footholds to be set up in (Vietnam), & Phnom Penh City
one year (Cambodia)

Ratio of profits gained from 15%
overseas operations in 2009

Ratio of profits expected 20%
to gain from overseas
operations in 2010

Bank Hua Nan

Existing overseas footholds Six branches and two rep.
 offices

Locations of overseas Shenzhen, Macao, Hanoi
footholds to be set up in (Vietnam), & Sidney
one year (Australia)

Ratio of profits gained from 20%
overseas operations in 2009

Ratio of profits expected 30%
to gain from overseas
operations in 2010

Bank Chang Hwa

Existing overseas footholds Six branches and one
 rep. office

Locations of overseas Kunshan &Hanoi (Vietnam)
footholds to be set up in
one year

Ratio of profits gained from 15%
overseas operations in 2009

Ratio of profits expected 20%
to gain from overseas
operations in 2010

Source: the said banks
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Article Details
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Title Annotation:First Commercial Bank, Chang Hwa Bank and Hua Nan Bank
Author:Li, Judy
Publication:The Taiwan Economic News
Geographic Code:9TAIW
Date:May 10, 2010
Words:461
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