Taiwan bank offers mainland service
1 October 2003
Sinopac Holdings of Taiwan is launching a local currency service in mainland China, the Financial Times reported. It is circumventing Taipei's ban on island banks operating in China by providing 'transpacific' accounts, whereby corporate clients can obtain yuan credit lines in China secured by US dollar deposits at its American subsidiary.
The ban has meant that Taiwan companies investing on the mainland have taken their business to local banks. In response, Taiwan banks have sought ways round the ban. For example Sinopac owns a US bank, Far Eastern National, which has an alliance with First Sino Bank in Shanghai, founded by a Taiwan manufacturing group. Under this arrangement, senior positions in the bank are filled by Sinopac's own managers, giving it effective control. Sinopac has said that it has an agreement with the owner of First Sino to buy his holding once the Taiwan authorities' ban is lifted.