Fubon eyes Yangtze River Delta regional market
By Ted Chen, The China Post
March 30, 2014, 12:03 am TWN
TAIPEI, Taiwan -- Fubon Financial (富邦金控) yesterday announced that its expansion strategy for its securities brokerage operations in the mainland China market has shifted focus from Fujian to the Yangtze River Delta region.
Company President Vivien Hsu (許婉美) said a memorandum of understanding (MOU) on a strategic collaborative initiative has been inked with Kunshan Chuangye Holding Co. (昆山市創業控股中心). The two companies have plans to establish a full-service brokerage subsidiary with Fubon slated to hold a 49-percent stake. Fubon stated it was compelled to turn toward the Yangtze River Delta regional markets after encountering setbacks in negotiations in Fujian.
Hsu also emphasized that despite the 49-percent limit in subsidiary ownership stakeholdings, the Kunshan government has consented to let the company take the lead in business decisions. In addition, the company will be able to take advantage of Kunshan's proximity to Beijing and Shanghai, and draw from their abundant human resources pools in upcoming expansions in the region.
The company mentioned that its presence in the China market includes a collaborative futures market operation with the Huishan Group (徽商集團), and the Beijing-based Founder Fubon Fund (方正基金), a company specializing in wealth management.
For its banking arm, Fubon stated that expansionary efforts will be focused on acquiring banks of Southeast Asian nations with a high concentration of Taiwanese businesses such as Malaysia and Indonesia, adding that the endeavor will be helped by local regulatory laws, which allow the acquisition of ownership stakes of up to 40 percent.
Incidentally, Fubon admitted that it has little interest in seeking merger candidates in Taiwan to bolster its domestic brokerage presence, as the value of expanding service locations is greatly diminished by the fact that more than 30 percent of market orders are conducted via the Internet. Meanwhile, amid rising social discord over the legislative approval procedures of the Cross-Strait Trade in Services Agreement, Taiwanese financial companies have been observed sealing collaborative negotiations through non-legally binding MOUs as opposed to more formal measures, said industry observers.