Taiwan Cooperative Bank, Chang Hwa Commercial Bank and First Commercial Bank, all Taiwan-based banking institutions, will soon open new branches in the kingdom.
The announcement follows a string of positive reports about the investment climate in the local banking industry, particularly as it pertains to banking houses from the island nation.
According to a report from Taiwan Business TOPICS magazine, Taiwanese banks earned $13.16 million in Cambodia during the first quarter of the year.
According to Taiwan Business TOPICS, a magazine published monthly by the American Chamber of Commerce in Taipei, Taiwanese banks are now targeting Southeast Asia for expansion. Banking houses from Taiwan are now present in every Asean nation.
“Government officials say that the New Southbound Policy is bearing fruit for the financial sector,” the report said.
“In the first quarter of this year, the highest earnings were recorded in Vietnam at NT$700 million (about $23.03 million), Cambodia at NT$400 million (about $13.16 million), and Australia at NT$200 million (about $6.58 million),” the report adds.
The Financial Supervisory Commission (FSC) has encouraged the state-owned Export-Import Bank of the Republic of China to provide guarantees and insurance for trade contracts. As a result, banks have been more inclined to lend to Taiwanese firms engaged in business deals in the region.
In an email response to the report, the FSC noted that it had already approved the establishment of 10 new outlets of Taiwanese banks in Australia, Southeast Asia and India.
Taiwan Cooperative Bank will open a branch in Melbourne, while Chang Hwa Bank and Taiwan Business Bank will add branches in the Philippines. The Bank of Taiwan has gained permission to set up representative offices in Vietnam, Thailand and Indonesia, and the Export-Import Bank will open an office in Mumbai.
Local regulations will play an important role in the ability of Taiwan banks to grow their market share in Asean countries, according to Cherry Huang, director of Fitch Ratings in Taipei.
“In countries where foreign banks are permitted to have full ownership of local banks, it’s possible to gain a stronger foothold than when only partial ownership is allowed,” she said.