Bank of China opens first Taiwan branch

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Li Lihui (1st L), president of Bank of China, Wu Poh-hisung (2nd L), honorary chairman of the Chinese Kuomintang (KMT), Chiang Pin-kun (2nd R), chairman of the Straits Exchange Foundation, and Cai Rongjun, general manager of the Taipei branch of Bank of China, attend the opening ceremony of Bank of China's new branch in Taipei, southeast China's Taiwan, June 27, 2012. [Xinhua]

Bank of China, China's major state-owned lender, opened its Taipei branch on Wednesday, making it the first Chinese mainland bank to start commercial operations in Taiwan.

The opening of the new branch aims to forge closer ties with Taiwanese firms who have operations in the Chinese mainland, including yuan settlement services once a mechanism is worked out, the bank's president Li Lihui said yesterday at an opening ceremony.

"The Taipei branch opening marks a major step in Bank of China's development as well as a milestone in deepening economic and financial cooperation between the mainland and Taiwan," Li told reporters.

He said Bank of China will follow the rules of both the mainland and Taiwan and contribute more to cross-Straits economic and financial cooperation through its corporate banking, personal banking and other services.

Services available at the branch are mainly those associated with corporate finance.

As the first mainland bank to establish cooperative relations with Taiwanese banks and offer services to Taiwanese business people, Bank of China has entered into business cooperation agreements with 10 Taiwanese banks and established corresponding banking relationships with 29 Taiwanese banks, according to Li.

The banking chief said the total credit that the Bank of China has offered to Taiwan-funded companies over the past three years is worth more than 160 billion yuan (around 25 billion U.S. dollars), and the bank plans to arrange 200 billion yuan more in credit to support the development of Taiwan-funded companies over the next three years.

Bank of China is the world’s top provider of yuan settlement services, which amounted to 803 billion yuan (US$126 billion) for the first five months of the year, Li said.

Li said that Bank of China hopes that financial markets in both mainland and Taiwan can be much more open to each other and a cross-Straits currency clearing mechanism can be settled earlier.

He voiced hope that the Taipei branch will play a great role in currency renminbi clearing business in the future when a cross-Straits currency clearing mechanism is available, which, he said, will benefit Taiwanese enterprises with mainland interests.

Li said his bank will make every effort to serve its clients including Taiwan-funded firms on the mainland, provided that prospective customers follow the mainland's industrial policies and meet the bank's fundamental standard of a qualified credit applicant.

The opening of the Taipei branch will enable the Bank of China to forge closer ties with the island-based headquarters of Taiwan-funded enterprises on the mainland and thus better serve them with the bank's global resources, according to Li.

Currently, only designated banking units can provide yuan exchanges services, but they cannot take yuan deposits or provide yuan loans. Further, domestic lenders may provide yuan-related business for corporate clients through their offshore banking units.

The mainland's Bank of Communications, whose branch opening application has been approved by Taiwan authorities, has yet to officially open its branch in Taipei. The mainland has so far approved the application of 10 Taiwanese banks to set up branches on the mainland, of which at least eight have already opened the branches.

Xinhua contributed to this story.

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