 |
| |
| |
The Recent Banking Developments in Taiwan* |
| |
Chi-Shiong Lee (李吉雄)** |
| |
|
| |
It is a great
pleasure for me to be here in Brisbane to participate
in the Sixteenth Joint Meeting of the Australia-Taiwan
and ROC-Australia Business Council. At the request of
the Committee Chairman, I would like to give you a briefing
on the recent developments of our banking industry. My
presentation will be divided into five sections. Section
one provides our recent economic performance. Section
two reviews the current banking situation in Taiwan. Section
three discusses some problems and difficulties encountered
by our commercial banks and their responses. Section four
examines the impact of Taiwan's accession to the WTO on
the banking sector, and the final section presents a brief
conclusion.
|
| |
I.
Recent Economic Development
A massive earthquake struck Taiwan
on September 21 1999, causing considerable damage to the
production capacity of our economy, articularly to physical
infrastructure. The overall financial loss was estimated
at US$11.5 billion. Despite this setback, real GDP grew
5.4 percent in 1999. Private consumption and export expansion
were the major driving forces behind this growth
. The Directorate General of Budget, Accounting and
Statistics recently lowered its projection for our GDP
growth this year from 6.73 percent to 6.57 percent, because
of the lower-than expected consumption and the decline
in trade surplus. In spite of the government's lower overall
growth forecasts, Taiwan's economic performance remains
healthy. Post-quake reconstruction, growth in investment
outlays and brisk demand for exports are expected to provide
much of the stimulus this year. Growth in private sector
investment is projected at 17.6 percent, as the promotion
of high-tech investment continues, the construction of
the high-speed railway gets under way, fixed-phone lines
are liberalized and independent power generation plants
are being established.
Export performance is expected to be stronger in 2000
as the Asian economies continue to recover rapidly, and
growth in the United States and European countries remains
buoyant. However, increasing private investment in plants
and equipment will require more imports. Since the surge
in imports (30.8 percent) offset growth in exports (24.2
percent), the island's trade surplus this year is projected
to decrease to US$6.3 billion from US$10.9 billion last
year. Our foreign exchange reserves stood at US$113.5
billion at the end of July 2000, next only to Japan and
mainland China. Although oil prices increased drastically
in recent months, prices of agricultural and industrial
raw materials remained stable or increased marginally.
Consumer prices are projected to increase 1.6 percent
this year, compared to 0.2 percent last year.
In the year 2001, Taiwan's economy is projected to grow
6.5 percent. The outlook for consumer prices remains relatively
stable with a low inflation rate of 1.8 percent. Foreign
trade will continue to expand. The government projects
exports will expand by 9 percent, while imports will grow
7.5 percent. The island's trade surplus will increase
to US$8.9 billion in 2001. |
| |
|
| |
II.
The Banking Industry in Taiwan
1. Increased Competition in Banking
Prior to 1992, the government owned almost all financial
institutions in Taiwan, including the commercial banks,
the specialized banks, the cooperative banks, and the
financial department of the general post office and its
many branches. To enhance financial competitiveness, the
revised Banking Law of 1989 liberalized the establishment
of new commercial banks. A total of 16 new private banks
were granted licenses in 1991 and 1992, and commenced
their operations in 1992. In addition, three trust and
investment companies were allowed to convert to commercial
banks in 1991 and 1999. The Ministry of Finance also encouraged
credit cooperatives with healthy balance sheets to convert
into commercial banks. Thus far, seven credit cooperatives
have become commercial banks. Last year the government
further granted licenses to two industrial banks.
At the end of June 2000, there were 6,075 financial
institutions, of which 491 were head offices (including
the Central Bank of China) and 5,584 were branches. Among
the financial institutions, there were 47 domestic banks,
39 foreign banks, 5 medium business banks, 50 credit cooperatives,
314 credit departments of farmers' and fishermen's association,
and one postal savings system.
The total population of Taiwan is estimated at 22 million
people. On average, one financial institution provides
services to about 3,600 persons, which is much lower than
the corresponding figures for Japan and Singapore (about
5,000 persons per financial institution). As a result
of the rapid increase in the number of financial institutions,
competition in the banking industry has become keener
than ever. They compete on price (interest rates) and
non-price (service charge, guarantee fees, etc.) factors.
Consequently, both the loan price and credit quality have
been lowered.
2. Privatization of Government-Owned Banks
The government-owned banks are subjected to a variety
of regulations governing public enterprises. In order
to improve the operational efficiency of the government-owned
bank to enable them to survive in the fierce competition
with the newly-established private banks, the government
decided to reduce its share of government equity in the
government-owned banks to below 50 percent.
The International Commercial Bank of China was first
privatized in 1971. It was followed by the privatization
of the Changhua Commercial Bank, Huanan Commercial bank,
First Commercial Bank and Taiwan Medium Business Bank
in 1998. Moreover, the Chiao Tung Bank and the Farmers
Bank of China were privatized through the reduction of
government holdings to the public last year. Today,
only 5 banks in Taiwan are government-owned, namely, Bank
of Taiwan, Land Bank of Taiwan, Taiwan Cooperative Bank,
the Central Trust of China and the Export-Import Bank
of China. The private banks have become the backbone of
the financial system in Taiwan as the total number of
private banks far outnumber government-owned banks. They
also account for the majority of total assets (71.8%),
total deposits (71.2%) and total loans (76.9%) of all
financial institutions.
3. ICBC
Please allow me to introduce to you the bank I work
with - The International Commercial Bank of China (hereafter
referred to as "ICBC"). The ICBC is the most time-honored
bank in China. It moved to Taiwan from mainland China
in 1949. The Bank was privatized in 1971 and changed its
name from "the Bank of China" to "the International Commercial
Bank of China".
At present, the ICBC has 64 domestic branches and 25
foreign units, including 19 overseas branches, 4 representative
offices and 2 subsidiaries. The ICBC has strong ties with
the Asian Pacific countries. It has two branches in Australia,
one in Sydney and the other in Brisbane. They not only
provide banking services to our valued clients, but also
promote trade and investment between Australia and Taiwan.
In response to the changing environment, the ICBC is
diversifying its banking operations, and promoting consumer
and investment banking. We plan to increase our domestic
loan portfolio for consumer loans to 50 percent in the
coming years, and at the same time we will also vigorously
promote the investment and trust business. |
| |
|
| |
|
| |
 下載全文預覽列印 |
| |
| |
|
| |
|
|
 |
|
