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Fubon steals a march on Greater China

Taiwan’s leading financial services firm stands to benefit from its first-mover advantage across the Strait.

No bank in Taiwan has made a more confident play to take advantage of thawing cross-Strait relations with China than Fubon. Progress for Taiwanese financial services groups in China has been glacially slow, and it will be years before it has any meaningful impact on the bottom line of any Taiwanese bank. But when the money does start to flow, banks across the country will owe Fubon a vote of thanks for getting the pioneering deal through.

When Fubon Financial Holdings bought a 19.9% stake in China’s Xiamen Bank in 2008, it represented the culmination of years of effort and negotiation. The deal was permitted because Fubon bought the stake through its Hong Kong subsidiary, and hence was not a direct purchase by a Taiwan-based bank of a Chinese one; consequently it involved close discussion between not just the People’s Bank of China and Taiwan’s Financial Supervisory Commission, but the Hong Kong Monetary Authority as well.

A minority stake in a smallish Chinese bank is not going to make a big change to anybody’s P&L, and certainly not Fubon’s.

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