September 01 2008
HC relief for insurance firms in mishap cases
Not satisfied, the driver’s family went to the high court where a single judge upped the amount to Rs 4 lakh and the difference was paid by the insurance
TAIPEI — Fubon Financial Holding Co., which this month will become the first Taiwanese company to have retail banking operations in China, hopes to win Beijing’s approval later this year to also start insurance operations there, Fubon’s president said.
The moves by Fubon, one of Taiwan’s biggest privately owned banking and insurance groups by assets, are part of an expansion in financial ties between the island and China as decades of political obstructions are eased.
Fubon was approved by Taiwan’s financial regulator in May to buy, through its Hong Kong subsidiary, a 20% stake in Xiamen City Commercial Bank in southeastern China’s Fujian province. Fubon earlier this year had applied to Chinese regulators for permission to offer property insurance in China. That approval was delayed because of the Beijing Olympics, but could be granted in the fourth quarter of this year, Victor Kung, Fubon’s president, said in the interview Friday “China is a very important area for our expansion,” he said.
Analysts and industry executives have long argued that restrictions on doing business in China have severely hindered the international competitiveness of Taiwan’s financial sector. Unable to operate in China, Taiwanese lenders have watched their big corporate clients who do business there turn to other foreign lenders for their banking needs.
The expansion of Taiwan-China financial-sector ties is accelerating under Taiwanese President Ma Ying-jeou of the Nationalist Party, who took office in May promising to bolster business relations with China.
Taiwan’s previous administration had allowed about a dozen local banks to open representative offices in China. But it declined to let the banks seek to open full branches that could serve clients until Taiwan and China hashed out a regulatory agreement. Beijing refused any such deal because it distrusted the previous Taiwanese president, whose support for increased independence for Taiwan clashed with China’s claim of sovereignty over the self-ruled island.
Fubon got its start in property insurance and remains the dominant player in that sector in Taiwan. But rival Cathay Financial Holding Co., Taiwan’s biggest life insurer, beat it to the punch in China’s insurance business. It has run a life insurance joint venture in China for several years, and obtained approval from Beijing for a Chinese property-insurance venture last November. Cathay was granted a license for that business at the end of August, and is scheduled to initiate operations this month.
However, Fubon’s stake in Xiamen City Commercial Bank will make it the first Taiwan lender able to offer services in China. Xiamen City Commercial is a small, regional bank with just over $2 billion in assets and some 30 branches, but it provides Fubon access to local clients, which most foreign banks find difficult to get in China. Given Xiamen’s population of two million and the size of its economy, “we actually gain another market almost of the size of Taipei, which is a pretty big market already,” Mr. Kung said.
