SinoPac Holdings promotes greater liberalization in ROC
By Ted Chen, The China PostTAIPEI, Taiwan -- SinoPac Holdings (永豐金) yesterday held an investors' conference, announcing that its banking subsidiary is poised to commence operations in the vast China markets in March.
February 13, 2014, 12:02 am TWN
Revenues for the company in January reached NT$1.46 billion, improving markedly from the NT$1.162 billion recorded in the same period last year.
Most notably, company Chairman Ho Shou-chuan (何壽川) yesterday urged governing bodies to accelerate progress toward the opening of the Taiwan market, as the domestic financial sector is facing heightened competition from Hong Kong following the inking of the Closer Economic Partnership Agreement (CEPA) with China. Ho warned that Taiwan's Economic Cooperation Framework Agreement (ECFA) with China is lagging behind progress made in Hong Kong, while urging for expedited legislative approval of the recently inked service industries trade pact.
According to Ho, SinoPac's two cross-strait deals are still awaiting legislative approval for the service industries trade agreement, consisting of agreements to initiate an exchange of ownership stakes with the Industrial and Commercial Bank of China (中國工商銀行) and a similar arrangement with the brokerage arm of a Xiamen-based financial group in which SinoPac is poised to gain a 51-percent stake. Ho expressed regret that the early success of ECFA in promoting more exchanges with China has now been overtaken by Hong Kong's CEPA.
Ho also commended the recent progress made in market deregulation by the government, saying that following the enactment of several policies, mainstream international currencies such as the U.S. dollar, the euro and the renminbi now comprise a 25-percent composite of deposits among domestic banks. In particular, renminbi-denominated deposits last year reached the scale of 200 billion, a figure likely to double toward the end of this year, Ho added. With these conditions in place, Taiwan is well-positioned to become a major regional financial center, said Ho.
Despite the obstacles of the service industries trade agreement, Ho stated that the company has made tremendous progress in expanding westward toward China. The company's subsidiaries in banking, brokerage and leasing are poised to begin operating within the end of the first quarter of this year.
Ho noted that the company's Nanjing-based subsidiary will focus on cross-border financial services, with interest earnings from lending activities expected to surpass Taiwan's market rates by two- to three-fold.
The company's Nanjing-based subsidiary was established with 2 billion yuan, marking the first landfall in China by a subsidiary of a Taiwanese bank. The subsidiary is expected to contribute 10 percent to the company's return-on-equities performance by 2015.