Taiwan's Fubon Financial Holding has vowed to raise the return-equity ratio of its local unit, International Bank of Asia (IBA), from just more than 8 per cent to 12 per cent in three years.
Fubon Financial chief financial officer Victor Kung said IBA aimed to achieve the goal partly by boosting the contribution from lending and wealth management services to Taiwanese businesses from almost zero to 10 to 15 per cent of profits and turnover.
IBA, to be renamed Fubon Bank (Hong Kong) next month following its takeover by Fubon Financial last year, also plans to set up a representative office in Dongguan, Guangdong province, this year to tap business opportunities from the 20,000 to 30,000 Taiwanese-owned firms in the Pearl River Delta. After two years, a representative office can be upgraded to a branch.
IBA's acquisition was seen as Fubon Financial's way of circumventing cross-strait political barriers to its mainland expansion.
By taking advantage of the Closer Economic Partnership Arrangement, IBA can enter the mainland market provided it meets the US$6 billion in assets requirement, compared with US$20 billion for foreign banks. IBA had about US$5.87 billion of assets at the end of last year.
'Not having a representative office is a weakness [compared with global banks] but it is not fatal,' Mr Kung said. 'If only 10 per cent of the Taiwanese businesses use our services, it will be a very large business.'
