Meet CTBC – Asia’s next green financing leader
With its sights on seamless cross-border capabilities, Taiwan's largest lender is opening the door to red-hot investing opportunities in renewable energy in the region.
Take a boat 50 kilometres off the west coast of Taiwan, and you’ll find over a hundred wind turbines, towering like giant sentinels on the water.
By the end of this year, their enormous rotor blades, connected to the island’s grid, are expected to harness enough energy to power a million households.
These turbines are but half of Greater Changhua – Taiwan’s largest and most ambitious offshore wind development to date, still under construction – and their presence is thanks in part to privately owned bank CTBC, which last year arranged financing of NT$82 billion for 50 per cent ownership of one of the project’s four wind farms.
That deal broke records as the largest offshore wind M&A transaction in APAC, and was noteworthy for its use of an uncommon and complex financial and hedging model, the first of its kind in the region.
Nevertheless, the bank’s extensive knowledge of derivatives allowed it to run a multi-tranche financing package, hold a significant hedging position, and support the creation of a major green energy source to propel Taiwan ever closer to its zero-emissions goal.
In the lead
As the planet’s climate heats up to unbearable levels and countries rev up sustainability plans, the global appetite for ESG investments has accelerated in tandem.
Taiwan’s unique opportunities attract a roll-call of foreign heavyweights. We will continue to invest in distinguishing our niche capabilities, to be in the league of top tier regional banks
And when it comes to Asia, Taiwan is an undisputed leader in the sustainability space, having been the first to launch ESG index futures on its stock market. Since 2017, it has undertaken a green finance action plan to mature its green bond market, and roped in private equity and venture capital funds to achieve its target of one-fifth of electricity from renewable sources by 2025, according to a PwC report.
In turn, landmark projects like Greater Changhua are among the many green deals handled by industry leader CTBC Bank, which this year was crowned Euromoney’s Best Bank for ESG Investing in Taiwan.
Its stellar credentials include issuing the nation’s first green bonds and sustainable bonds, undertaking financing for major offshore wind, solar and waste-to-energy projects, and launching an electric vehicle investment fund with Foxconn to develop regional supply chains and tap on its niche in electronics and battery manufacturing.
“We will extend our reach to Japan, Australia, and Southeast Asia, as these markets plan to follow Taiwan’s renewable energy path,” says James Chen, president of CTBC Holdings. “We focus not just on reducing negative impact, but also supporting corporates on their sustainability transformation journeys.”
Indeed, CTBC’s rising star as one of Asia’s most sustainable banks is not just thanks to its dealmaking prowess, but also a sophisticated approach toward responsible lending and investing.
The bank sets portfolio limits for ESG-sensitive industries and corporates with high ESG risk, and supports 65 per cent of these companies on sustainability transformation programmes, which it submits to a global ratings agency.
“We advocate a standardised approach in quantifying emissions among financial institutions in the region,” says Chen. “What gets measured gets improved. Helping institutions understand their emissions is the first step in making a positive impact.”
Of course, the bank walks the talk. It is an early adopter of international standards and best practices in ESG, such as the Equator Principles (signed January 2019), the UN Principles for Responsible Banking (December 2019), and the recommendations of the Task Force on Climate-related Financial Disclosures (April 2020).
These and more advantages – such as being the one of the few local banks experienced in offshore wind projects – have won it the mandate of corporates and developers, and distinguished it as the bank of choice for international clients pursuing sustainable financing opportunities in Taiwan and the region.
Going digital, and international
With its roots as an Asian bank, CTBC has toptier regional ambitions and the network to back it up – the most extensive of any Taiwanese financial institution. Its 372 outlets, spread across 14 markets, are part of an internationalisation strategy focused on unlocking opportunities in high-growth Southeast Asia and economic superpower China.
“We are one of the very few banks rooted in Asia, with coverage across Greater China, Southeast Asia, Japan, and America,” says Chen.
CTBC Bank’s core offering is unparalleled cross-border capabilities for mid-sized corporations, and compelling market coverage of offshore asset needs for affluent investors.
To this end, it is building a regional platform, leading cross-industry innovation alliances with tech heavyweights Apple and LINE, and overhauling its technology architecture to offer seamless digital experiences, such as API connectivity with government agencies and an AI-empowered, real-time decision engine.
This tech-first approach has paid off in spades: the bank boasts 5.5 million digital customers and a 57 per cent monthly active rate, on par with major banks in China.
In addition, it has the highest revenue and profits among commercial banks in Taiwan, while assets under management last year – for clients with assets of over US$1 million and over US$5 million respectively – grew by about one-fifth and one-third,
Chen’s next goal is to double profits in the next five years, as the combined momentum of its digitalisation, internationalisation and ESG accomplishments strategically position the bank to open up regional opportunities in green finance and beyond.
"Taiwan’s unique opportunities attract a roll-call of foreign heavyweights,” says Chen. “We will continue to invest in distinguishing our niche capabilities, to be in the league of top tier regional banks.”